Unfortunately not going to happen in the case of Colossus. They have 86 mil in bonds outstanding, down to 15% already. These bonds will be repayable now instead of 2016 if Colossus takes on new debt. At least they need to get the ok from note holders.
These notes are even senior to the Sandstorm royalty. Colossus Brazil is in with 10 mil, after that the notes have to get repaid or Sandstorm gets nothing.
It is foolish to think that Serra Pelada won't produce soon. But probably it's not going to be for Colossus.
Absolutely right. Perhaps that's why Bob keeps Snowfield. In the case of a takeover you put all your most positive stuff up, studies about npv etc.
Takeover offer for PVG would probably lead to a bidding war like 2001 between NEM and AU for Normandy. Was a happy time for Normandy shareholders.
Reminds me of Colossus, still have some shares there. It's funny how people believe in new debt financing when the old notes yield 55-60%. Either new debt has to have a yield of more than 60% or it must be senior to the notes which will trigger maturity.
Financing is a big problem in is market environment.
Don't think PVG will declare anything. They will just follow developing their deposits: First Cleo, then additional veins funding Brucejack completely, then later on if the gold price is right Snowfield.
Brucejack has LOTS of room to grow. I honestly think this one is better than Red Lake.
So currently I am less interested in the share price. Share price matters if you need financing and perhaps PVG will not need a financing ever again.
Why pay a dividend if you can spend the money better internally?
Just a question: Why don't you change your mind when the facts change? Are you some sort of perma-bear on PVG? Probably a second Cleo worth another triple digit hundred million amount.
The price of gold is important if
-your deposit is marginal
-you need financing.
Both issue do not apply to PVG. This is a company that may be able to grow the business to dozens of millions of ozs in reserves if someday. It is unique, ultra low-cost now and marginal Snowfield project for the future.
If one tries to short a sector then one should not pick one of the best issues out of the whole sector.
300g in more than 20m, that's the real deal. I think Brucejack is the elephant the industry was looking for. Pretium today seems like the combination of all the good things or Donlin and Red Lake combined.
I think so too. But nonetheless the naysayers will calculate their Cleo = anomaly scenario and we should be prepared. Simple as that.
I think todays drill results show that VoK is the real deal.
And there is nothing wrong in that. But why not part in a reasonable way? "There is no valid gold resource" reminds me of an ex-wife making somewhat overblown accusations.
Look, the issue here is that I can already see what's going to happen once the final results are out. Naysayers will come out, exclude all Cleo associated high grade tons, come up with 7000t or so like I do and calculate the same 10 g/t.
Then they will compare that to 4000 ozs estimate for 10000t which is higher. Some folks will even declare the resource model invalidated because of the failure to validate the grade of the model in the lower grade areas.
The mistake here is that the initial 4000 ozs estimate is invalid itself. The estimate is for all non-Cleo, non-615 cross-cut tons + an expected high-grade area.
If you want to exclude the Cleo effect from the bulk sample you have to remove the initially expected high grade area at the Cleo location from the initial bulk sample result estimate too.
No it hasn't, read again. I am interested in the grade of the first 7000t of the bulk sample.
My estimate is 1800 ozs recovered from the first 7000t, excluding all Cleo ore.
Or watch Robert Quartermain interviews on youtube. I think he comes over as a very competent, honest and self-conscious but not arrogant type of person.
Because we have to anticipate the bulk sample results and be prepared to make quick decisions when they are released.
And it is not the grade of the deposit, it is the grade of cross-cuts through stopes AND waste areas. 10 g/t would validate the Snowden model.
Estimate was 4000 ozs for a 10000t bulk sample
Result so far: 4000 ozs for 8000t
Probably inclusive of some ore from Cleo. Probably only 1800 ozs from 7000t non-Cleo ore.
The 4000 ozs estimate is bogus. Because
1. either you don't change the plan and include ALL of Cleo's ore = result will be way higher than 4000 ozs
2. or you exclude Cleo ore = old estimate of 4000 ozs invalidated
If you expect a 30 g/t high grade zone, but discover the grade is 100 g/t and then decide "oh it's not representative, so let's exclude it" then the effect will be that the initially expected 30 g/t won't be in the bulk sample either.
You have to see it this way:
estimate 10000t = 4000 ozs consisting of
7000t = 1800 ozs
3000t = 2200 ozs
9600t consisting of
7000t = 1800 ozs vs 1800 ozs estimate
2600t = 6200 ozs vs 2200 ozs estimate
Of course if no Cleo ore included my scenario is incorrect. But I bet some Cleo ore is included. 4000 ozs seems somewhat too high for only non-Cleo areas.
And if the bulk sample turns out as I estimate it would explain why Strathcona found way below 10 g/t in the sample tower, why they resigned and last but not least why they are wrong.
PVG estimate was 12 g/t with expectation of a higher grade zone where Cleo is located (then still undiscovered).
My estimate for the bulk sample without Cleo ore is 7000t yielding 1800 ozs. Roughly 10 g/t.
Is that an invalidation of the resource model.
NO! The 12 g/t estimate was with the inclusion of the ore of the Cleo area. If Cleo would no have been discovered and the estimated higher grade resources of 20-30 g/t would have been there and included in the bulk sample the recovered grade would be somewhat above 12 g/t.
PVG should split the bulk sample into Cleo and rest of bulk sample area and adapt the 4000 ozs estimate accordingly. Only then it will be visible that any possible future criticism of the non-Cleo area ore grades is unfounded and indeed above resource model estimate.
My calculations are assuming 40% of the Cleo cross-cut have already been treated. So just a possible outcome.
BTW, how come Farquharson speaks of 16 g/t and "we found nowhere near that"?
PVG estimate for the bulk sample is 12 g/t because there are waste areas included in the cross-cuts. Without Cleo area the bulk sample grade estimate is somewhat lower, 10 g/t or so. The sample tower will show still lower results, I think 5-7 g/t.
So yes, Farquharson did find way lower grades than 16 g/t, but even 5 g/t in the sample tower does not contradict the resource model. So he is making a lot of misleading comments.
Keep that in mind that after the bulk sample results the naysayers will once again try to spin this in an negative way. Headline numbers will be bombastic anyways.
Whatever, normally a royalty is a far better investment than the operating company, but in this case due to the low cash costs it does not make much difference if you buy a royalty on the project or into the operating earnings. And if you can still buy something for half what FNV paid for it you will make your money.
How much of revenue will go to mining, royalties and taxes? I guess 75% is a pretty conservative amount.
Farquharson has not prevented the 1.2% NSR on Brucejack being purchased by FNV for $45 mio.
25% * $45 mio / 1.2% / 100 mio shares = $9.375/share. Soon.
It's now 60% or so of all buys after June this year. Can't sell my old shares due to tax reasons. Overall it's a single digit perentage. If I could I would put 15-25% into it.