G'day AJ, The alliance thing usually means if Ausdrill are not...

G'day AJ,

The alliance thing usually means if Ausdrill are not the cheapest quote MYG will give them the competitions prices so Ausdrill can match it. I would expect at current prices MYG should be able to blast for less than $6 a cube. If they don't something is wrong with the tender process.

Ausdrill will only supply services for open pit and exploration. And they can supply a very cheap price per cubic meter because they keep rebuilding old drill rigs that have already paid for themselves many times over.

The only thing I would be worried about is can Ausdrill provide the necessary expertise to keep the ore bodies intact when blasting narrow vein ore bodies. They definitely have the expertise in house but that expertise is stretched far to thin to ensure the right people will be onsite.
The biggest things that will effect recovery of ore will be the Blasting contractors skill in not diluting ore with waste, not loosing the ore body completely through crap blasting(this is very common in narrow vein) and having drill rigs that don't leak oil and grease all over the ore.(likely with shit rigs) Oil and grease damage the recovery process at the mill.

I expect to get share dilution investing in spec gold companies, its part of the game. Smart directors know successful exploration drilling gets the share price up to a point where dilution is minimised. That's why I think it was share price vandalism to stop the drills when results were coming back fantastic.

Also it is laughable when directors self congratulate them selves on building a good ore body. When its not pure luck which is most of the time its nearly always one of the geology team that's responsible.

Mining company directors are the most over rated part of the work force in our industry. They crow and spruce how they made the company when its all down to how lucky you are finding a quality ore body. Basically being a successful profitable miner comes down to having such an good ore body that no matter how badly you mine it you still make money. Look at BHP & RIO, two of the most inefficient no talent mining companies going. But that's a rant for another day.

The Ausdrill guys have been most successful Drill & Blast contractor in the world. Maybe through dodgy means at the start but they are very capable business men and very shrewd operators. They would not give up any coin if they couldn't see real value which they would know about in this industry. A real vote of confidence in the ore body.

Now all we need is some further exploration success than a possible take over offer. Good times

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