Has TAM bitten off more that it can chew? Coyote is producing...

Has TAM bitten off more that it can chew?

Coyote is producing ~50K oz pa atm with a good deal of upside from underground and regional exploration. High grade ore from Gonzales and soon from Bommie with costs coming down all the time. The new MD and his team have been able to turn Coyote around from a high grade, high cost underground mine previously beset with problems that had led TAM almost to the brink. His experience in being able to profitably mine high grade underground vein systems and the coup of hiving out our NT tenement interests to ABU whilst retaining 250M sahres in them, has probably saved the shareholders' bacon, and I was feeling a bit warm and fuzzy looking forward.

Then out of left field comes Groundrush, and the market didn't take too kindly to the acquisition even though it came with a 700K oz JORC and a 2.1Mtpa gold mill that needs a refurb. that won't be cheap. I've checked FML and they spent the best part of $50M to do theirs and it's smaller than Groundrush.

They're the cons, now here's a few pros (if you haven't collapsed).....

* the Groundrush mill has been on care and maintenance for about 4 years BUT it has only ever been in commission for about the same time, producing ~500K oz for Newmont, so it hasn't exactly been overworked and MAY not need such a huge amount for refurbishment.

* that amount of gold poured for Newmont in the time frame gives us an indication of what a high grade gold deposit Groundrush is.

* Newmont didn't quit or offload GR onto TAM because it wasn't profitable, they did so to concentrate on Callie and Boddington, Aus's 2nd biggest goldmine.

* GR is high grade and only drilled ~100M depth with the grades remaining high in EOH. There is great potential for exploration success at depth and the project fits ideally into the suite of prospects suited to an up and coming second tier producer such as TAM.

* Newmont wouldn't have built such a huge capacity gold mill if they hadn't done DD on GR's and surrounding holdings potential. IMO anyway.

* Finally, I've done some research on the Tanami goldfields mainly in relation to the Callie and GR deposits although there are many occurrences of gold within the tenements TAM has acquired as part of their package. It was interesting to read that Groundrush started life as the deepest of the deposits in the area at ~4.5Km depth, deeper that even Callie. I'll provide you with a link if anyone wants to do any research:

www.ga.gov.au/servlet/BigObjFileManager?bigobjid=GA12177 -

The reason I did some reading was because I was surprised at the mkt's reaction when I know the company is run by a top team of professionals, and I thought maybe the mkt may have gotten it wrong.

Of course I'm a shareholder in TAM but I'm not writing this to try and prop up the sp, just giving other s/h some positive insights into their company's direction and progress. I'm actually on record as saying that I continue to p/u shares if they go lower.

I believe that one day in the not-to-distant future, TAM will achieve the goals set out by Graeme Sloan and become a 200-300K oz gold producer.

Regards,
chick