By buying out the NSR they will end up way ahead at the end. Approx saving of 8 to 11 million..pay back would be in 2 years. Factored in, EG1 will dry up around 2018 and giving EG2 a 4 yr mine life, but obviously that can change to even better numbers if EG2 grows..In 2015 we paid 2.8 million in royalty payments. Going forward those payments have disappeared. Good move!
Bmcnally..at that level difficult to predict the future. But seems to me for right now its a excellent play on gold if you want to roll the dice...management expectations seems to be very high...
It is quagmire though. Do you wait until they de-risk their projects but then pay a premium much higher or do you #$%$ them now and pay much less. On the other hand these other juniors want to make money as well and wont let go projects knowing there leverage has strengthened . Not mentioned yet is a Joint Venture, much like Hoch did with Minera. Production with even higher upside in which the Junior will need help with.
As share price rise so does our chances of raising money for EG2 and Gold Bar without disrupting cash flow and cash reserves. At just $2.80 it will only take 20 percent of the market cap to raise the money for both..At a more opportunistic price of $4 it would be 13 percent. But I know one step at a time, lets wait for EG2 report to come out first
If gold price stays steady and or keeps rising Rob will have to focus more on growth, unlike the last 4 years in which balance sheets and margins were the prime concern. We waited for a long time for things to change but what's most glaring is that the growth profile has taken a hit. Hochschild having the same problem should help our cause and I foresee a aggressive action plan at San Jose. EG2 needs to come thru. The study coming out Q2 will indicate higher cut off grade which will certainly shorten the mine life from 6.5 yrs probably down to about 3 to 4yrs but production would be higher. I'm sure Mux will develop the mine with a good plan to store stockpiles or the use of waste dumps once we are able to use lower cut off grades. Thirdly growth will come from a acquisition or 2. Rob has been investing into quite a few mining projects lately..one of which I already mentioned is Goldquest...that's the most develop out of all of them and IMO its cheap..
Unlike season one, season two was not nearly as intense we basically made it thru with ease, but it was more about turning old foes to new friends in Janet Yellen, Gold ETF's, the dollar, interest rates...I think together we can move through season 3 and 4 fairly quickly. Have a great weekend!
When I see dollar signs in my eyes I'm holding and perhaps adding until I see the cycle start changing again. Miners just have too much MONTROUS leverage to gold which it makes it way too difficult for me to sell. As u can see this sector explodes just with just the scent of rising gold prices . The 14 percent rise in gold from 1050 to 1250 equates to a booming 133 percent rise in profits per ounce to miners with a AISC of 900. On the other hand if you have some trading intelligence you can make even more money by trading in and out of the stock...but I just don't have the stomach for it nor the chart expertise to make that endeavor worth while.
In Season One we battled Yellen and Rob found a way with lots of work, money and perseverance. Season Two Rob can vacation in Rio De Janeiro and Yellen will do all the work for him.
If you want to play Goldquest is further in its development,,Rob owns 9 percent of the company...PFS due out in spring....its gold and copper...cash cost and AISC are real good...unusually the feasibility study is scheduled right after in Dec. Guess they want to keep the momentum rolling...
RM: McEwen Mining (MUX:TSX; MUX:NYSE), of course. It has huge insider ownership, positive cash flow, good optionality in terms of the gold and silver properties, in addition to its very large copper project, and exploration potential in Nevada, Mexico and Argentina. Despite the low gold and silver prices, it has been generating increasing free cash flow over last three quarters, the treasury has been growing and the balance sheet is solid with a small amount of debt. Management exercises fiscal discipline and will not build a mine unless the project can generate a 20% internal rate of return (IRR), has a low capex and a capital payback in three years or less. There is no harm leaving the gold or silver in the ground and waiting until the prices improve before raising capital to build.
TGR: Two other companies that fit those criteria?
RM: One is GoldQuest Mining Corp. (GQC:TSX.V). The company's property is located in the Dominican Republic, so it is nearby and in a stable environment. Its management team has a successful record of discovery, mine development and building value for their shareowners. Its Romero property has an attractive grade and good exploration potential. It has not encumbered itself with royalties or metal streams, has no debt and has a small but sufficient treasury to keep moving the project ahead. I must disclose that I own 9% of the company
my question was tongue in cheek....rising yen with japans negative interest rates in a nut shell illustrates the worlds economic quagmire
With holes in the parachute. Todays decent resembles yesterday's. The first hole was punctured when Yellen acknowledged a US economic slow down about 3 months ago. The US economic data could no longer be ignored. Things have worsened with Brexit and the unprecedented monetary easing in Europe. Any interest rate hikes will impact a already worrisome trade deficit, which has widened in the past year(2015) mainly due to the strong dollar. US growth rate is todays problem and the FED needs to engineer a way to reverse its path, especially in a election year. Yellen gave the gold market some lead time witnessed by golds action the past 3 months. The dollar was slow to react but a VERY clear ceiling was created. Yellen yesterday confirmed everything she had told us 3 months ago...I think it that was straw the broke the camel's back for the dollar.
Yeah, I was enjoying days by the pool most of the past month and this rain came out of no where for a couple of hours...it caused panic amongst the natives :)..im originally from NY