- How do we plan to create shareholder value?
- What are the next steps?
- Given the Company's resouce has a relatively low average grade, is it fair to assume that it requires a much higher gold price in order to be economically feasible?
- Does the metallurgical recovery process prove to be a challenge in recovering gold from the resource?
- Does the mine tailing accident near your project area create big hurdles in permitting for your project?
1. How do we plan to create shareholder value?
When the Company’s market cap is compared to the potential project value revealed by the recent Preliminary Feasibility Study, there clearly is a significant discount in our share price. Closing this discount will deliver rich rewards for our existing and future shareholders. And the PFS demonstrates the value for mining only the near-surface/ higher grade reserves as a standalone operation—covering less than half of the total mineral resource! We believe our dual project objectives will close this price discount and add additional asset value over time. To put it succinctly: Objective 1: fast-track development of the reserve through critical project milestones; Objective 2: rapid resource expansion through drilling.
2. What are the next steps?
With a supportive gold price environment and secured funding, we are ready to advance our project on a sustained basis! The project is now well funded to pursue our dual objectives. With the extensive work we have done over the years, we believe we can achieve both of our objectives with a compressed timeline and a modest budget. We will announce our project work and progress on a regular basis.
3. Given the Company’s resource has a relatively low average grade, is it fair to assume that it requires a much higher gold price in order to be economically feasible?
This is a popular assumption: resources with lower average grade require high metal price to be economic. This is only a half truth! Yes, lower grade means lower “revenue” per tonne of resource. But economic returns must also factor in the “cost” side of the equation. Our most recent Preliminary Feasibility Study and many previous studies have demonstrated our project’s cost advantage given our excellent infrastructure and proximity to labour, suppliers and grid power. As shown in the PFS, the delineated reserves can potentially deliver robust production and profitability. In fact, throughout the world, the type of bulk tonnage gold deposits we have turn out to be low cost producers in spite of the grade.
4. Does the metallurgical recovery process prove to be a challenge in recovering gold from the resource?
Not at all. We have completed detailed confirmatory testwork in our project’s recovery process. The project has a simple flowsheet with conventional milling that has low power cost and reagent consumption. We are completely confident with the high overall recovery demonstrated consistently in the latest PFS and previous studies.
5. Does the mine tailing accident near your project area create big hurdles in permitting for your project?
We have a long history of community engagement and transparency in operating our business. Community members have direct access to senior management to express any concerns they have about our project. We have not received any negative feedback regarding our project or the way we run our business in the aftermath of the accident. More importantly we believe that there are many significant differences in our proposed tailing design and water/ discharge management so that community’s concerns can be adequately addressed. Our studies have always incorporated our proposed design and water management strategy. At this point, changes in the permitting process in light of the accident do not appear to have materially impacted our project. In fact, our high standards in dealing with issues related to Environmental, Social & Governance (so called ESG) give us confidence as we advance our project through the environmental assessment and permitting processes.