Adding to my post from yesterday I think we can expect a lot of upside compared to the numbers in the updated DFS. Without going into the details of my conversations, the upgrade in the mining rate is not some silly plan to create a mountain of ore on the ROM pad. If the plant runs above name plate capacity (like say Andy Wells did on rock that is close in hardness) then the oz produced will be much closer to the ore mined number than the number that has to be reported in the DFS (i.e. nameplate). The upgrade in the power plant from 500kW to 600kW is not a minor detail.
I also had a very interesting conversation with Lindsay about the geology of Rothsay and the difficulty in capturing certain features in the resource model under the JORC reporting requirements. I don't want to go into details, but I think when they get underground we might be very pleasantly surprised by what they find.
One thing that came through very clearly was the need for us to do our own NPV modelling based on information that can only be gained by reading between the lines in the DFS and looking at other mines. JORC is a general set of requirements and it does not always allow companies to report what the data is suggesting. It helps stop the worst abuses of the hype merchants, but it also stop companies reporting accurately what they know.
On a less positive note there was a recognition by the team that their promotional active was less than ideal. I am hopeful that we will see more activity in this area soon as it is really holding EGA back in the market. When you look at the BGL SP (lots of goss on that) and you look at the EGA SP you know the market is not finding the underpriced companies on its own. The market is not efficient down in the juniors.
EGA Price at posting:
24.5¢ Sentiment: Buy Disclosure: Held
