tanami

This is likely to be one of the better performers of the year. I've read the misinformed comments over the last several months. It's easy to be negative when the stock price is falling and with the financial crisis - and I've noted the positive comments recently when the price is rising!

Management is actually top class. It was extremely hard to hire good people in the mining boom and only now can they do that. It's no surprise to see the share price rising. The cash flow multiples suggest a share price of ~10 cents before factoring in the very large regional upside - largely untapped, but with several encouraging exploration results such as Lake Mackay. The nearby Callie mine has been producing 500koz p.a. for many years. The Tanami desert is one of the most prospective, unexplored gold regions in Australia.

The Coyote mine has now been developed down to 4 levels. It is ready to produce gold at grades of 13g/t. How many world gold mines have grades as high as that - and at shallow underground depths? The mine life is reasonable already, but importantly there is great potential to extend it. The recent drilling encountered stacked gold veins which could in all likelihood be mined by bulk methods, lowering operating costs significantly. They will also mine the significant open pit reserves at Bald Hill and Coyote open pit in the New Year - very valuable at today's gold price.