Agree with others thoughts. The quarterly was a good one. Also happy to see they are keeping costs at what I feel is acceptable.
They will have approx $8m at the start of the Sept Q. This will be after they release the rest of the BFS + any resource updates etc to allow them to fine tune the mine plan.
Not sure if anyone has discussed this, but I note that they state the average grade for their reserve is 1.7g/t, yet its actually 1.75g/t, sure, its not a huge difference, but... when you punch in the numbers for the plant operating at between 1.8-2.0mtpa, then EAR is most definitely looking at producing 100k p.a.
I am very hopeful that they will be able to convert more of Julius high grade ounces into reserves, as that will, likely see EAR push its mine life out towards 10 years. A huge milestone in such a short time for a company with a plant ready to be refurbished.
I also like that they are looking at debt funding part of the costs, which, are going to be low (as they have already successfully explained to the market). Surely they could borrow $20-30m for the refurbish and initial mining costs? Leaving the company only needing around $10m, although I imagine that NST is probably pushing EAR to up their drilling program considerably to the north.
I would feel a little more comfortable if EAR was able to hire someone that has recent and proven experience in bringing a mine into production on time and under/on budget, DCN and GCY will likely have a few such people that might be twiddling their thumbs later in the year?
This is to me, ever more important than getting the funding. Proven staff are far more important to the mine being profitable, than being able to raise cash. Any spec stock can do that, and they don't have the advantage of having NST as a 20% shareholder!
I keep looking across the sector for a stock with a better risk reward at this stage of the development cycle, and I cannot.
EAR Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
