ADU looks undervalued to me on a $/resource ounce basis compared...

ADU looks undervalued to me on a $/resource ounce basis compared to peers. Successful completion of the plant/mine construction should lead to a re-rate. There would appear to be good exploration potential in ADU's properties which is near the processing facility. ADU is initially planning to treat oxide material only, so some of the resources (and probably future discoveries at depth in fresh material) will not be treatable by the plant in its current configutation - as this will most likely be sulphide mineralisation. This isn't a show stopper - just a plant modification to treat sulphide material or toll treat agreement with a nearby mine which has sulphide treatment capability.

CEO departure - don't know for sure, but he was a commercial guy by trade (probably not the best to run an operating company - as opposed to an exploration & project show), he had been there for a good time already (time to do other things), he had practically achieved a mine construction milestone (commendable), his options are expiring in October and are excisable at current price (so not much intentive here), the previous COO was obviously waiting in the wings for the step-up (wouldn't want him to leave in this critical time of construction/commissioning). Personally, I think he would be leaving to do other things with higher financial incentive and a change of scene.

Hedging - again, not sure of the reasons/drivers, but MacBank financing would definately have had hedging as a condition. Gold has hit $1300/oz, hedging is at ~$1100/oz - not a bad result for something that is thrust upon the company to secure funding is it ? If gold was still hovering around $1100-1200/oz, it would hardly be an issue would it ? The biggest risk is if they can't deliver into their hedgebook and are forced to buy it on market - this is when they would actually be losing ~$200/oz (on current mark to market) - a few companies have gone under this way.....

The thing to remember is that they will be making good cash from operating activities ($1100/oz sales - $450/oz cash costs) = 140% operating margin. Lots of surplus to retire debt, pay for CAPEX, fund exploration, etc....

I agree the recent capital raising seems strange. You would have thought that prior to construction, all funding requirements (debt and equity) would have been locked away. Maybe some cost over-runs ? I don't think the MacBank facility is fully drawn so maybe ADU thought that accessing additional equity funding is preferable that drawing down more MacBank debt (even is there wasn't cost over-runs). Maybe more drawdown on MacBank facility triggered more conditions (hedging) that ADU didn't want to take on.

From the outside looking in.......