Ann: Metaliko to Progress Mine, Truck, Treat Proj, page-2

re: Ann: Metaliko to Progress Mine, Truck, Tr... I like it. The Goongarrie JORC might appear sub-par, but the shallow mineralisation will make the plans to MTT more than feasible.

Here is how I see it.

If we sell 12koz from Goongarrie over three years, then that accounts for around $6M revenue each year. If cash costs are $700/oz, then we are looking at around $3M operational profit per annum over three years from here.

Then the Anthill prospects...

For mine they should be looking at producing and selling at least 10koz from Anthill per annum. Assuming the same cash costs as at Goongarrie, then that would lead towards about $8M operational profit per annum over at least a decade.

Combined, that is $11M profit/annum for the first three years, and $8M profit/annum for at least another six to seven years after.

Chuck a PE of 5 on the average of that earnings figure ($9M) and you have the two projects combined being worth about $45M in EV once production begins.

Now I have no idea how much the upfront costs will be, but I trust it is quite low given how the announcement is worded. How about we start with $15M.

Given a cash balance of $3M, MKO would have a cash liability of $12M, which I imagine will be debt funded. We would pay off that upfront cost over the first year and a bit, and then the company goes cash-flow positive from here on in.

Hey you can't argue with that. I'm holding on to these ones. I see great potential, especially given the larger prospects in the area as well. The market might be knocking the stock right now, but with a current EV of just $4M, I struggle to see how we can go wrong with this one in the long term.

Remember the options are out of the money right now, so with just 60M shares on issue, the stock is cash backed at around 8c per share.

Sentiment is to buy and hold.