I managed to speak with Jeff yesterday to discuss the latest RNS etc. I last spoke to him a couple of months ago but I find he's a top bloke who always tries to make time to reply or chat to us PIs. I managed to scribble down a few notes and below is a summary of our quick conversation, may be of interest to some.
Regarding the interim Jorc I asked Jeff whether or not Snowden were generally tough on the numbers compared to CSA. The answer was yes so bearing in mind our Jorc is solely based on the 35km Phase One drill data, to get 700k of Indicated and an increase in resource to 2.6m is a good result from this particular consultant. It looks like we lost a lot of ounces from the exclusion of the RAB drilling data although clearly that doesn't mean it isn't there, just that they need to drill and prove it.
I asked how Phase Two could be drilled within the time frame as end Nov looked too optimistic with 3 rigs. Jeff pointed out that GGG have estimated end of 2011 and that it's possible to get another rig on site. Clearly there is a cost implication of another rig but the sooner we get to BFS the better. I noted that AZX are publically committed to this target as well so that is a good thing, although AZX will need to sort out more finance to achieve this target.
This discussion lead on to the BFS question. Daily drilling is progressing at a good rate and Phase Two results will 'probably' be available early Q1 2012. Hopefully the BFS may be around about the same time as the next Jorc results to give us our Reserve, so Q1 2012 should be an interesting time for us and its only 5 month away!
Corporate Action. While acknowledging that he couldn't say much about the consolidation of BBling I did try to see where we are with this. Jeff re-iterated the company view that talks were on going and that both companies agree that BBling needs to be under one umbrella. I got the impression that there had been progress but that there was still items yet to be agreed. I'd venture a guess that this still has at best several weeks and probably a few months before an agreement can be reached. I can see this dragging on for a while longer at any rate, but I guess situations and opinions can change quickly in business.
So to summarise, from my point of view the Jorc was as expected and now knowing how tough Snowden can be it is probably better than I'd hoped considering its just Phase One data. I'm not confident the consolidation issue is likely to be resolved soon but I am very confident that the results of the drilling and Reserve number will be very good. John Lawton is talking about 1.5 to 2m oz of reserves, GGG are being more conservative and saying 1m plus. With Snowden doing the Jorc the true figure is probably going to be somewhere in-between, say 1.2m to 1.6m oz. That will still be a fantastic result and there is still plenty of upside potential in the exploration targets and at depth!
Only down side from my point of view in having a great initial Reserve is I think BBling will become too tempting for a major and we will get snapped up before we get into production. Oh well, such is the way of things.
GGB Price at posting:
35.0¢ Sentiment: LT Buy Disclosure: Held
