The issue is what the grade of the reefs are. If they can show the grades are higher than what the initial ore reported (3g/t) then they will be able to raise money - admittedly at a very dilutive price. If the grade turns out to be 3g/t ORS is toast as the mine will be unprofitable and there will be no scope for a capital raising. That's the risk here ...
It's a binary outcome in my view. If the reefs grade at 6-8g/t headgrade to the mill then the company is worth more than the current EV of $4.3m. If it turns out to be 3-4 g/t then ORS will not be worth anything - a stranded old mill and two uneconomic, small gold deposits. Maybe worth a little as an option on a much higher gold price in the future ...
Cheers
John
ORS Price at posting:
3.0¢ Sentiment: None Disclosure: Held
