SAU 4.35% 8.8¢ southern gold limited

Agreed that Kochang and Gubong will progress quickly once...

  1. 91 Posts.
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    Agreed that Kochang and Gubong will progress quickly once permitting is completed however scale is small at the moment, so any profits, which would be welcome, will not be large.

    If Cannon was to be monetised then there is likely to be a few gotcha's along the way:
    - The resource wont convert 100% to a reserve, so some of the ounces will not be extracted - this is normal but counting on all the ounces turning to money isn't a good idea.
    - A smart partner will insist on management control, so there goes another slice of profit (if it's like the MLX deal, at least 50%). Then you've got the question of who in SAU has the smarts to oversee the implementation of the contract. I'm guessing no-one, so there's a slice going out to consultants.
    - The performance of the pit towards the end showed that geotech is likely to be a problem in places. If it is then ground support could be expensive. Not an insurmountable problem, but a cost that could mount up.
    - If the partner doesn't have a mil then that means toll treating, which in turn has the potential to be very expensive.
    - Assuming a mill is available then you've got haulage and I'm guessing this will be ca. 20c / tonne / kilometer and if the mill is in the Coolgardie Shire then I believe there is likely to be additional costs on top of that.

    And then there's time, which is slipping away while we're still burning money on overheads....

    Regarding rumblings of discontent - this doesn't surprise if it is building, the real surprise is that it's taken so long. Looking at the register, some have been there since before the consolidation and I'm thinking would not be happy campers frown.png

    All just my opinion, as in the the absence of anything substantial from the company, all you can do is guess.
 
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