I have been accumulating at these levels and below SPP for a while, hoping for a risk to reward payoff in the coming 12 months
I thought I would note some of the reasons down as to why I have taken this share on, and hope some people can debate them for the pursuit of greater knowledge
- Current small mining operation, netting roughly 100 USD per ounce on 700-800 ounces per month, this gives credence about ability to engage locals and small mining rehabilitation
- Mining permits for another add to small scale due soon
- Mining permits for large scale mining that should see production of 25-40,000 ounces per year due in 2nd qtr next year
- If mining permits secured this turns economies of scale into probably 200-300usd per ounce profit at current prices, that could translate to 4-15 million USD profit, I believe this implies a MC of 50-100 million based on earnings multiples
- Current EV per ounce in the ground on the 3.6 million ounce reserve is one of the lowest compared to peers
Now some risks
- Community engagement and approval with authorities, this is a prickly one - Have runs on the board in getting locals onside after some other companies hurt the local area - hopefully translates into future approvals
- Risks associated with crime and illegal mining which create an opportunity for WWI to put in stability and create positive outcomes - however authorities and local communities are wary
- Gold price dips to below 1000 USD per ounce Currently 1200 - not sure of profitability below 1000 usd
I believe the company is kicking goals and some have not been timely but they are associated with bureaucracy more than own management.
If the keep kicking goals over next 9-12 months I believe they will have significant SP appreciation
This is my thoughts and research, it is not advice, but I am looking for debate!
