Thank you Esh for the time you have spent on this when you do not hold .
As I understand it your concerns are the 2018 remodelling did not provide enough data for you to have confidence in the company’s interpretations therefore it is hard to place a value on the shares.
Current share price values the company around $82 million....
The mine life was initially reckoned at six years.
On current considerations, this may now be reduced by the removal of Golden Wings.
You say beyond this Gascoyne is presuming and counting on gold at depth in the Gilbey’s resource which is not yet confirmed?
Is this ‘par for the course’ with junior miners ?
- I have seen other mines publish results that just say “open at depth”.
In case anyone else is interested here are the images:
View attachment 1416837
Whether or not other mines generally go deeper before coming up with projections I think Gascoyne’s priorities (as stated) have been to ‘keep the patient alive’ rather than worry too much about about the longer term future.
Also I did understand the 85% LOM reference to Gilbeys is about its newly increased status as a contributor to the overall life of mine. (I think before it was only going to be 60% but can’t remember) which is why you think it is important to consider ‘what lies beneath’ the current drill depths.
To restate the obvious : That jump in Gilbeys importance to Gascoyne is because Golden Wings was supposed to be providing 100,000 ounces and providing it early:
View attachment 1416775
https://www.gascoyneresources.com.au/gascoyne-projects/dalgaranga-gold-project/
From expectations as per image above at the hedge price of $1710 an ounce, a zero-producing Golden Wings pit represents $171 million?
Simply wiping this away means tightening the belt by an average of $28.5 million a year on previous estimates of a six year LOM.
(- No wonder there has been chaos in the company.
“
RECONCILIATION TO RESERVE
As previously stated reconciliation to reserve for the project to date has been below expectations. ......... Golden Wings has seen global reconcilaition to date at 67% of reserve tonnes (1,049kt vs 1,573kt) and 67% of reserve grade (0.81 g/t vs 1.20 g/t), with Golden Wings accounting for 59% of the reduced ore tonnes and 64% of the ounce losses.
The Golden Wings laterite ore accounts for more then half of the reduction in ounces.” (November 28 update.)
(FWIW a historical story on previous Golden Wings expectations:
do not advertise external links.au/...00000oz-production-at-golden-wings-67180.html))
Eshmun in regards the long term future I don’t know.
As you say no one can know.
But we ARE informed about short term future :
In November:
“It is expected that the majority of the first quarter of calendar year 2019 production will be based on grade control drilling informed models.”
That is pretty clear ?
In the
December 24 update
- Forecast gold production guidance for calendar year 2019 (CY2019) is now 92,000 – 102,000 ounces at an All In Sustaining Cost1 (AISC) of A$1,220 – A$1,320 per ounce.
- Forecast production has been impacted by the previously advised reduction in mineral inventory of 22,000ounces in the updated Gilbey’s resource model, with the majority of this impact felt in CY2019. The Gilbeys South and Plymouth pits have been accelerated in the new schedule to partly offset this impact.
The market obviously looks at long term as well as short term future and long term does have some health concerns but Gascoyne has the well auspices Glenburgh up its sleeve and I expect any major company savers will now come from genuine positive exploration results .
Cheers
