I think sau know their mining experience weakness, and the need...

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1982

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13/12/18

08:39

Post #: 36841895
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Originally posted by JKahn ↑

Originally posted by jogo
Liquidity issues will be resolved if the company delivers results. Broker spin is not a lasting solution. I do not trade the stock and so not concerned about daily volume.
I was surprised at the take up of the other WA projects in view of the current funding. SAU was already cash weak and so why take on other tenements?
Cannon was supposed to be the cash engine and SK the opportunity. SK remains the opportunity so far as I know, while Cannon is now an opportunity as well as a cash liability.
Interesting discussion Jogo & 1982.
IMO developing Cannon, while looking attractive on paper, will have similar issues as developing the open pit:
- SAU are explorers with limited mining experience (i.e one BOD member), and I suspect no staff with mining engineering experience.
- The nearest mills are owned by SLR and a private(?) concern at Lakewood near Kalgoorlie
- The Higginsville mill (WGX) is likely to be out of the question due to distance as the SKO mill is now owned by NST
- A toll treating agreement is always to the mill owners advantage. Timing of treatment may also be an issue.
- Mining is always capital intensive with large outlays upfront before any income is derived. For short life operations this can be a potential risk if everything doesn't go exactly to plan.
- The ground conditions shown in various pictures and the need to extract the last ore from the pit by an adit suggests that u/g development wont be cheap.

Takeaway? A similar arrangement that was entered into for the open pit is likely to be necessary, which in turn will likely mean either a hefty c/r or giving up a chunk of the project.

As usual DYOR!

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I think sau know their mining experience weakness, and the need to bring in experts. I hope they will be shopping this around straight away.
The new slr/drm entity could look interesting. Will be cashed up to. What is there UG track record like?

SAU Price at posting: 17.0¢ Sentiment: Buy Disclosure: Held
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I think sau know their mining experience weakness, and the need...

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