Originally posted by spokesy2009
Good morning all,
Wow how far this little spec has come in 12months, I must first congratulate the entire VEC team, what an incredible fete to tie up the majority ownership of a world class mine in ‘Adidi-Kanga’. Congratulations to the faithful who have held on, we have had to filter through loads of negativity, the VEC team has booted all of it out of the park.
The market has played 'It’s in the DRC card' for so long. Gold is becoming scarce, gold spot is on the increase, Vectors SP will benefit from such sentiment and confidence within the sector, as production nears this will be even more relevant!! Operations are funded through until completion of DFS and decision to mine takes place. This great company is going places.
Now that Adidi-Kanga is in Vectors sweet little hands, I would expect news flow to increase, I think the market will be awoken to the true potential here.
I don't ever recall a junior acquiring a world class mine.... I think the market hasn't factored in the other 2 acquisitions which could be close to being sealed also. This would complete the Triple D that we have been long waiting for.
Adidi-Kanga is ready to shock the market, I believe some investors are still querying why did Anglo gold drop the project, simple answer they went through a whole restructuring process in which they dropped the Kanga. Now that Vector have majority ownership of the project, I would expect more intricate details will come to hand.
The DRC as we all have been aware has just gone through an election process, in which Mr ‘Tshisekedi’ this is an amazing outcome as the new leader is anti-corruption, a people’s person, the candidate numerous countries around the world had selected as their preferred candidate. This will open the DRC up for foreign investment, as confidence and security should improve moving forward.
Where we are at project wise-
Adidi-Kanga Gold Project-
View attachment 1413492
- $500 million already spent on the project.
- As can be seen in the picture above, close to the township of Mongbwalu, water, electricity, roads etc
- Over 340m of diamond and RC drilling already completed.
- Completion of feasibility study for development.
- Commencement of initial mine construction activities.
- 70% of equipment already on site as proposed to be installed under the feasibility study.
- Equipment valued at approximately $70 million (condition report will come with acquisition being completed) this cannot be far off.
- JORC 3.2Moz of contained gold (I would expect this to be increased considerably, purely speculation)
- DFS fully funded, planned to commence upon completed acquisition. (note as per announcement 24th July 'DFS to commence immediately and will be accelerated due to the project being permitted for development, with Environmental and social impact assessments completed and financial guarantees in place with the appropriate regulatory and administrative bodies).
-“The review of the status of the Adidi-Kanga Gold Project has confirmed that the Project is already permitted for development, with Environmental and Social Impact Assessments completed and financial guarantees in place with the appropriate regulatory and administrative bodies. This confirmation was an important step in the process to ensure that the Company could achieve the completion of a DFS in a quick timeframe.”. as per yesterday’s announcement.
- Vector Resources has now secured $55 million US to fund the project through until production.
NIZI Gold Project - Expecting deal to be finalised near term
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- Highly prospective area with significant historical mining, significant prospects already identified.
- Surface drilling leading into DFS and U/G exploration on historical mine.
South Kibali Gold Project - Expecting deal to be finalised near term
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- Historical Inferred resource of 28.1 Mt at 1.61g/t (1.47Moz)
- Limited drilling program leading into DFS
Maniema Gold Project - (news well overdue)
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- 70% ownership.
- Kabotshome prospect most advanced with JORC Inferred resource of 421,000oz's, open along strike and at depth.
- Ore body definition drilling towards PFS and regional exploration.
Capital structure -
- Adidi-Kanga is fully funded through until decision to mine (once decision to mine occurs, revenue will not be too far off, preventing many more capital raises, if any).
Working capital is covered by debt funding which is not required to be paid back until decision to mine.
- Don’t expect any Capital raises In the near future regards Adidi-Kanga.
- Further dilution cannot be ignored, which includes Formosa's shares as apart of purchasing the project.
Moving forward it is clear Vector is well positioned to make a bold move forward in the gold sector, during a time when investors will look for safe havens. This bodes well for Vector if they are able to get to production at speed. I don't think management have been sitting on their hands for the past 12 months, they have had ample time to ensure all negotiations and plans are well advanced. I think this company will truly move forward at pace and we will have plenty to cheer about in the months to come. The hardest bit in this whole process was acquiring the asset, this as we know has now been completed as of 11thJanuary.
I sleep well at night knowing we have Jason Brewer driving the Vector name though his hard work on the ground and ensuring his presence its felt by the DRC conglomerate which has gained great respect.
We have Simon Youds and Andrew Steers working behind the scenes getting the deal completed and also ensuring the next part of the process runs smoothly. Both Simon and Andrew have been involved in such activities before, I am sure the next 6-12months will surely have its hiccups and hurdles, but with the current Vector team I think they will get us to many multiples of today’s market cap with ease. This team is well equipped to say the least.
All I can suggest is start digging below the surface of the announcements and DYOR, this is a once in a life time opportunity serving itself up to us all.
A great starting point is with the most recent top 20, it is scattered with those working closely with Vector or are on the ground in the DRC. Some big names backed by massive amounts of knowledge and experience.
I have looked into our neighbours “Kibali” as per announcement in May
May 10, 2018 - The company plans to mine between 1.3-1.35 million ounces in 2018 at a cost of between $590-$640 per ounce. Randgold's only mine in the Democratic Republic of Congo, Kibali, raised output by 2 percent to 171,948 ounces quarter-on-quarter but was up 22 percent on the year following a full ramp up.
https://uk.reuters.com/...randgold.../randgold-labour-strikes-hit-first-quarter-gold-outp...
Working off their numbers as a rough calculation
Adidi-Kanga alone is 3.2Moz even at the extremities working off a cost of $620/ounce gold with today’s Gold price nearing $1300/ounce that is a profit margin of $680.
This would put Vectors profit for current resource size at $2,176,000,000
Yes, you just read that correctly $2.176 billion dollars
These calcs can vary depending on grades in ground and plant efficiencies on site, but this Is a great starting point.
What kind of market cap do you think this would warrant.
Remember Adidi-Kanga is a well-advanced world-class gold asset, ask yourself does it warrant a 20-mill market cap!?!
Analysts are calling a potential 5 year Bull run for Gold, imagine where Vector could be then, IMO I believe many offers will be on the table moving forward, management will already be well aware of this.
This is AIMO please DYOR
Resources - http://www.vectorres.com.au (Company announcements and news)
Good Luck to all fellow Vectorians, we will all soon be Vectroious,
Ok being far too punny now
Enjoy your weekends
p.s. let’s keep these posts on track.
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There are certainly a lot of positives here but there are some things we do need to consider when talking value, notably:
1. About half the resource identified in the Feb 2018 Ann is in the indicated category - Post #:
30816853. The mine plan here is actually twofold in that Feb Ann been open cut (where a 1/3rd of that resource will be developed from based on the current resource estimates) and the remainder targeted as an underground mine. This information is in the Feb 2018 Ann in the link herein, but might change in due course. You do not mine an 'inferred resource' btw - see point 7 below.
2. Point 1 raises a few issues because costs differ between underground and open cut mining. VEC has an exceptional grade of gold under the proposed acquisition, because in open cut mining, mines for example in Australia can be viable, assuming sufficient ore, when the ore grades 1 g/t (grams per tonne ) to 2 g/t. Here the gold ore in the open cut section grades plus 6 g/t, and already they have around 650,000 ounces in that Indicated Category - table 3 of the Feb 2018 Ann. And I expect costs to be lower in the DRC than Oz.
3. In terms of the underground section, cut off grades are generally higher than open pit operations, but here the ore still grades plus 5 to 6 g/t. But cut of grades can be 3 g/t or more for underground mines depending on the extent of the orebody -
https://investingnews.com/daily/res...ing/gold-investing/world-class-gold-deposits/
4. Going to the VEC Feb Ann, the cut offgrade in the open pit section was proposed at O.8 g/t, whilst for underground mine was 2 g/t in terms of the JORC Code, but the DFS will more specifically pinpoint the cut off grade. In terms of the underground section - Table 4 of the Feb 2018 Ann- they have 850,000 ounces in the Indicated category and when you add that to the ounces in the Indicated Category in the proposed open pit section you get roughly 1.5 million ounces in the Indicated category here already identified in the proposed acquisition (with another half in the Inferred bucket). See point 7 below.
5. What I am alluding to is this will be a complicated development, which I suspect will start with open cut mining, and when that resource is exhausted they will then move to underground mining. Unless of course they can do more mining through open cut.
6. A real positive here is VEC has essentially been gifted US$70 million in capex as well as having many of the approvals in place. This development can therefore be fast tracked to production with just a few hurdles to clear IMO
7. Having a resource in the Indicated category is a very good thing. When you have an indicated and measured resource you can then apply some economic and technical principles to see how much of that resource ends up in a proven and probable reserve that underpins the bankable study (i.e. a mining development) - essentially your DFS. Note: Inferred resource does not lead to a mine unless that resource is pushed into the measured and indicated category. I note in thecurrent Ann they are also talking about some further drilling - the idea behind that is to boost up your indicated and measured resource so that you can then do your bankable study on and move the indicated and measured resource to the proven and probable category which underpins mining decisions. The pic below explains that:
8. Suspect after the acquisition VEC will fast pace the DFS, but will do some more drilling to get more resource into the measured and indicated category on which the DFS will be based upon.
9. In terms of profit, we want more resource in the open cut category, hence, the reason for writing this post as cost structure differ in open cut to underground mining (as does mining process obviously and rate of extraction of the gold ore). Profit outcomes should nonethless be good here IMO hence why I expect VEC to rerate well over the next few weeks
10. Obviously this is a great acquisition but need to keep this in perspective that things still have to be done before mining starts but the building blocks are certainly there, and by hitting the ground running I wouldn't be surprised if mining doesn't start here sometime in 2020/21 as a guess (assuming funding also comes in a timely manner but noting VEC does have some building blocks in capex already funded in that US$70 million gift that I yabbered about above).
All IMO IMO IMO
The VEC team Geologist have had since the 22nd December 2017 to go through Millions of Dollars of research available thanks to Anglo spending $700mil including 173,276m of diamond and RC drilling and a completed a Feasibility Study.
