re: comparison of mgl and baa (banra) Both MGL and BAA are...

re: comparison of mgl and baa (banra) Both MGL and BAA are quoted at the TSX.

MGL or Moto is 98% owned by MOE, price: CAN$7.90. BAA: CAN$12.00

Websites: MGL: http://www.motogoldmines.com/corporate.php

BAA: http://www.banro.com/s/Lugushwa.asp

Shares: MGL: 43.5 mill. Warrants: 7.9 mill, directors, staff options: 4.24 mill. Other: 7.0 mill. Some of these Options date to 2011.
BAA: Shares 32.65 mill; Options/warrants 4.41 mill.

CASH: MGL: US$20 mill. BAA: US$ 28 mill.

Exploration: MGL: 15-16 mill ounces by July 2006, of which MGL has 10 mill ounces. A proposal has been put to enlarge the area and this ought to bring in more ounces.
BAA could have approx 9 mill ounces by that date but can produce more after.

Grade: MGL: 2.7 gt/tonne. BAA: 2.8 gr/tonne. Both are drilling better grades lately.

Location: MGL: Congo: North East.
BAA: Congo: Central-East. This area was vacated by BAA because of wars and they returned in 2002:
BAA: http://en.wikipedia.org/wiki/Sud-Kivu

Location of Projects: MGL: A cluster of Deposits, located close to each other:
http://www.motogoldmines.com/projects_prospects.php

And Map: http://www.motogoldmines.com/Moto%20Regional%201_250_000%20A3%20West%20Sheet%20290405.pdf

Location of Projects: BAA: Four stand alone projects along a 210 km gold belt:
http://www.banro.com/s/Properties.asp

Production Plants needed: MGL: One Plant serves all projects, MGL: "But the company could generate as much as 800,000 oz/year once it started mining gold from its underground regions. Capital for the startup is estimated to be between US$160m to $200m". Initially about 250,000 ounces of Gold will be produced. (Post 906974).

BAA: Four stand alone plants needed for its Projects which are separated by a fair distance. Cost: US$110-$130 mill. each. About 250.000 ounces to be produced.

START UP DATE of Production:
MGL: End of 2008.
BAA: A year later.

Other: Eckhof said the company would be moved to Britain’s Alternative Investment Market (AIM) later this year and delisted from the Australian Stock Exchange. It would retain its Toronto and Frankfurt listing, the latter representing its most active bourse". (Comment: I can see the MOE owned MGL shares distributed amongst MOE holders).



SUMMARY: While the number of shares differ, BAA has a lot more drilling to do. Also, their production starts about a year later. MGL can centralize everything and the same workforce and infrastructure can be used for all Deposits of the Moto Project. BAA cannot.

MGL can start on underground mining after a couple of years and as envisaged haul some 800,000 ounces from the massive project. BAA will have some underground mining but on a smaller scale, Project after Project with interruptions.
The safety factor is higher in the MGL controlled area compared with that from the BAA. However, elections will be soon and unrest seems to be much less in this huge country.

Considering the significant advantages of MGL's Centrally controlled area containing all deposits as well as Production starting a year earlier than BAA, I feel that the current MGL share price of CAN$7.90 be upgraded and be at least that of BAA (CAN$12.00) before the BFS takes place.

MOE (MGL) or MOTO concentrated on drilling rather than publicity and it is only lately that Executve Officers are concerned with the latter. The Mining Conference at Capetown and the current visit of Canada by Eckhof ought to at least redress some of this discrepancy.

That is my opinion.

Subject to audit,


Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.