Hey Infidel,
I agree that the two companies have their similarities, however, as CMM approaches what it states is when debt funding 'solution' (Oct 2018), sadly sentiment is not in their favor the way that it was back when GCY raised $55m in total. It was a huge raising for a company of their size and while they have done further raisings, totaling a further approx $51m, meaning add in their debt facility and they are up to $161m, to build, commission and run a plant for 3 months, when the original capex was just $90m, shows that sadly, the number CMM are bandying about right now, is not how much the company will actually need to get into commercial production.
I speak from a somewhat bitter perspective, in that I had great confidence that GCY would have been in commercial production within 3 months of turning on the plant, sadly, it will be more likely around 5-6 months. That means, running a plant for (even for CMM), at least 3-4 months, although their plant is about 30% bigger, so the initial upfront costs to actually undertake the stripping, fill the ROM pad etc etc, costs big $$. To date, CMM have steered well clear of providing any sort of number for pre-production costs... I actually understand why, because, it will be a big number, which, when you add it to the $132m so far budgeted. Meaning, if you add in exploration drilling, admin and potentially, ever rising fuel costs, the number might look a bit more like $170m. Of course, this number won't be reached until later because this is how the game will be played (which it has taken a me so long to really cotton on too).
So, they state debt will be 55-65% whilst equity will be 35-45%. Which means they need to raise at least $135m (they probably have approx $3m in cash right now). Which gives approx $74-87m in debt, with $47-60m in equity. For a company that has an MC of just $44m, that is, ah... a huge feat!
GCY's market cap was from memory, around $160m when it did its $55m placement. So while it can be done, sentiment was very high at the time for the gold sector. I am quite confident that CMM management are hoping that will change by Oct, and of course, it could, but... so far, things are quite rough in the sector, unless you are NST.
They have a lot of gold in reserves, but... if you take a close look at this graph, CMM, is, well, truly all or nothing in its first 3 years, if they don't go extremely smoothly, well....
View attachment 1303280
So... why have I come and posted on CMM when I am quite sure most will not enjoy reading my post, because, I am quietly wishing I had listened to Eshmun and others over the past few years about just how difficult it is to get a mine into production, and only the best of the best management wise can pull it off successfully. Perhaps CMM have the skills and know-how, but... a huge amount of dilution is to come and I wish all holders good luck. GCY actually has some acreage near CMM, and I like CMMs ground, plus to date, CMM management have proven themselves more competent that most.
(20min delay)
