| From: sense | 10/1/2023 8:06:45 PM | | | | | | SPACtacular failure... PEARQ... (avoid)... and learn from others mistakes.
The point, here, is not how easily you can see shares slide from $10 to $0.0001... and from a market cap of $1.6 billion to 28K... in 2 years. But, rather, about noting, first, how many people in the market are easily able to avoid asking the right questions about... management having done their homework on the requirements for taking a product to market.
It appears they were the market leader in their space... advancing a wholly valid idea... that makes perfect sense... saves money. And, in a free market they'd be clear winners. But, reality intrudes... given socialized medicine means it is not consumers or doctors making decisions and paying for services... but the worst qualified people on the planet... deciding for you... based on criteria that have nothing at all to do with... what people need... what works... what makes sense... or, any other aspect of reality.
The CEO blaming the insurers... is not wrong. But, it's management's fault for not properly understanding how payment for things they're trying to sell occurs in the markets they're addressing... and solving that problem before taking a product to market and (sacrificing their investors by having them) falling on that sword...
And, not just management... the "analysts" that gave that investment a green light... when there was obviously not a chance that the management they had were well enough prepared to be and able to succeed ?
The concept, meanwhile ? Prescription Digital Therapeutics... being destroyed by bureaucratic ineptitude ? And the object lesson just provided... along with the short list of competitors who bought the "parts" at auction... ?
If you operate in any highly regulated business, you need an experienced "compliance" department head, but when it overlaps from "meeting routine standards" into random obstructions of sales based on problems in overcoming inertia... someone has to be capable of managing "The Department of Dealing With The Usual Bureaucratic Government Bullshit"...
Systemic problems to address, too... as "capital access" issues... "the market" taking no responsibility, either, for solving problems that are imposed on "the market"...
Why did they allow themselves to fail... without seeking marketing partners who had the experience and capital required to succeed ? Or, did they try... and... found no one willing to listen ? Hmmm. |
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| From: sense | 10/2/2023 12:19:42 AM | | | | | | "Best" gold stocks... includes musings on SA and NFGC...
Extracted from Wall Street Zen: (on 1 Oct 23)
A short list of "the best" gold producers ranked: first by Graham Fair Value % (lower is better: -91% says it is undervalued by 91%... perhaps limiting the risk of future declines as well as measuring potential upside in appreciation potential) and then by Free Cash Flow Yield (higher is better... measuring cash flows that can be used to pay the bills... thus a measure of lesser risk in sustainability). And, whatever the business does... the return to owners in higher present (and future) yields are a useful consideration... having impact in return on your own investment.
GAU (-91.86% / +0.34%), (0.00% yield)
SBSW (-86.24% / -0.21%) (+6.00% yield),
AU (-58.97% / +13.22%), (+1.18% yield)
SSRM (-24.85% / +0.22%), (+2.11% yield)
GFI (-33.36% / +14.24%), (+3.78% yield)
EGO (-52.87% / -57.87%), (0.00% yield)
BTG (+28.30% / +8.96%), (+5.54% yield)
KGC (+57.71% / +8.42%), (+2.63% yield)
The evaluation based on basic financial performance and risk metrics is useful... but, obviously, its useless in valuing "future potential values" that require awareness of "the value in the rocks" and "the capacity of management to deliver"... so, it can't be used to determine relative values in explorers... or, for that matter, the risks inherent in producers based on life of mine calculations, or various operational risk factors, etc.
Some of those factors are (more or less well) introduced by considering analyst opinions... so the list below is sorted by "% potential upside"... as a function of analysts opinions... creating some obvious disconnects between what analysis of "the numbers" suggests... and what "analysts expect".
GORO $0.43 +659
VGZ $0.43 +481
GLDG $0.79 +473
USAU $3.11 +366
GAU $0.59 +256
TRX $0.37 +255
NG $3.84 +160
SA $10.55 +136
SAND $4.66 +136
CGAU $4.90 +124
NFGC $4.17 +115
CTGO $18.14 +104
ORLA $3.57 +103
IAG $2.15 +92
OR $11.75 +87
GOLD $14.55 +83
KGC $4.56 +61
FSM $2.72 +56
NEM $36.95 +52
BTG $2.89 +47
SBSW $6.17 +46
SSRM $13.29 +43
AU $18.80 +39
EGO $8.91 +36
IAUX $1.53 N/A
I note all three of my "top picks" among explorers are on that list:
SA $10.55 +136
NFGC $4.17 +115
IAUX $1.53 N/A
As IAUX seems it has no analyst coverage, you can't quibble with them... other than wondering why ignored.
I've covered it recently enough... but, they've made a lot of progress recently, so should check in on it again to see what's new... and generate my own "guess" about where its heading, and when it might get there.
For SA and NFGC... I have to wonder what they're considering in making their estimates...
For NFGC they're predicting it may reach $8.97... less than the $10.71 attained in May of 2021... apparently thinking its been "sitting there" since then... and not drilling hundreds of holes, and figuring out the nature, the scope, and the scale of the deposit (to a particular depth limit) that they're working to define ? Giving that couple of years of work done since May of 2021, and what we know its been showing, in hole after hole, portion after portion of the trend... no value ? And, ignoring what its now ready to begin working to show us, with the assistance of models integrating "ground truth" results from drilling, with "vision" of structure below ground enabled by high res seismic... which will be applied in guiding them in the targeting of future holes ? All of that is given... essentially no value ? You have to shake your head in wonder. And, buy a few more as the markets let you average down... It looks like they're really not paying any attention... NFGC is wrapping up their initial analysis of the seismic survey now... and "soon" [when is that?] will begin using it... and we'll see if its got the potential some of us expect... with the first few holes drilled to test the concept... looking for "more" that's "deeper"... delivering results, and refining the model based on what they find... and looking again,
For SA... from $10.55 they project $24.90 as the upside. It was $21 in December of 2020, $34 in April of 2011 (while gold peaked at $1830 in August of 2011... and today its at $1860). SA was $35 in May of 2010... $36 in Oct of 2007 (when gold was under $800) ? While they continue work to prove up more over time, they've already got a stupid mass of value proven... "stupid" to the degree that having something like the largest copper deposit on the planet... its just too much to wrap your head around... so when talking about its value, they just leave the value of the copper out, and only talk about the value of the gold contained. And, for the first time in their history... they're telling you they're expecting to enable a partnership or a financing event to move it toward production... and they'll announce that within the next year (they said 10 months)... And then, will (finally) begin moving the KSM toward production ? I think the predictions they have for future price... are simple reflections of prior recent price history... and nothing more. The market cap, today, is under a billion dollars.
Here's a list of the top 100 miners by market cap... including many of the largest copper and gold miners... Here's a list of the top 10 gold miners by reserves... SA likes to say they're in the top ten in reserves... but, they've got reserves of 88 million ounces, and "indicated" of 65 million... and that's just in the KSM project. The 88 million puts them at number three, between Barrick at 76 (market cap $25 billlion), and Newmont at 96 (market cap $29 billion).
And, then... the value in the gold is actually said to be worth less than the value of the copper... but recent changes in focus lower the bar to get a gold mine started... as discussed here... ending with this note:
"The stock offers massive reserves at a cheap valuation. Theoretically, each $12.93 share [Ed. $10.55 currently] controls $1143 of gold and $295 of copper in the ground. NovaGold is the only company with a comparable project. Each $4.62 share of NovaGold controls 0.057 ounces of gold, which is $97.19 of gold in the ground."
That value of $1400 a share... will cost $6.4 billion, just to build a mine at KSM... "So, the biggest risk for Seabridge Gold shareholders is that they cannot find a partner to start a JV".
Except, they've already told us they've got that well in hand... expect news in less than a year...
The other issue, of course, is they've held this value for a long, long time... without it happening, yet... and most people are still not expecting to see any change in the dynamic... and are not paying attention... and won't... until after it happens. |
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| From: sense | 10/2/2023 2:55:36 AM | | | | | | NFGC - Clearing and Surface mapping the Keats Zone...
The point of which is improving the 3-d models of the deposit... by correlating what's visible at surface with what drilling and the seismic survey work show... And, now that the 3-D Seismic Survey Is Complete...- The final phase of the program consisting of data cleaning, compilation and interpretation is now underway with a targeted completion date of October 2023, while more detailed interpretive work will continue into Q1 2024.
- Upon receipt of the initial interpretation, the Company intends to generate drill targets for immediate testing in Q4 of 2023.
Supposed to take from mid-August to the end of September to clear the over-burden from Keats... and then take a month to complete the surface mapping work... finishing surface mapping around the end of October.
And, then, one must suppose... it will take some additional time to correlate the mapping work done with the modeling based on drill core, and the interpretation of the seismic now ongoing in parallel... Then, the surface map being compared with the seismic data... we will see what the comparisons show in terms of enabling better interpretation of both "the data" and "the structures" inside the earth... and then get to test that with new drilling... |
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| From: sense | 10/2/2023 4:23:05 PM | | | | | | NFGC
In the video I linked recently Quinton Hennigh is discussing NFGC's ongoing exploration, and stumbles a bit in trying to find the words to describe it. And, he points out, its hard to actually keep track of what's happening and what it means, because there's just such a constant flow of data coming out of very aggressive drilling program... so there's really not any way you can justify doing the deep dive on each new bit of news... it leaves you wallowing in data more than it helps to illuminate things.
So. I took a quick "over-view" look at the work done in the last while... to see what is there to sort out.
There is a "big picture" that's not hard to decipher from making that effort...
A good place to start is with the Sept 27 release... which, by itself, in the headline values, is just another in the massive series of mind-numbing data points... but with two main points:
1. NFGC Intercepts 3.29 g/t Au Over 42.4m,
2. NFGC Further Defines 30m+ Thick Gold Zone at Keats West
Both work "to announce the results from 11 diamond drill holes that were completed as part of a drill program designed to test the newly discovered Keats West Zone, a low-angle thrust fault that dips gently to the south-southwest and is located on the west side of the highly prospective Appleton Fault Zone ("AFZ")."
The highlighting to help unpack it...
- 3.29 g/t Au
- over 42.35m in NFGC-23-1129 as well as 2.19 g/t Au
- over 37.30m and 1.73 g/t Au
- over 24.00m in NFGC-23-1091
- occur just 30m from surface and
- 80m along strike from previously reported 42.6 g/t Au
- over 32.00m in NFGC-22-960 ( November 2022) at Keats West. These holes were designed to fill significant gaps in the main portion of the Keats West Zone.
- Keats West has a known
- footprint spanning 305m long by 315m wide and
- starts at surface with all intercepts drilled to date occurring above 130m vertical depth. The zone has a cumulative
- average thickness of 30m (Figures 2-5).
Summarizing it... they have defined a 305 meter long x 315 meter wide zone, 130 meters deep... that contains an known ore body 30 meters thick... containing gold values ranging from 2 grams to 42 grams/ton.
Their prior efforts in the Keats zone ran into difficulties in trying to define the meaning of the complexities observed in steeply dipping structures. This release contains the same language warning about that problem "the host structures are interpreted to be steeply dipping and true widths are generally estimated to be..." Except in this case, that's not really true.
- Today’s highlight intervals are interpreted to be
- close to true width,
- occur near surface, and
- demonstrate that the gold mineralization can span cumulative widths greater than 60m in places. Drilling to date has identified several locations within the Keats West structure where this occurs with one such example being the aggregate interval of 1.94 g/t Au over 79.75m in NFGC-22-833 reported March 21, 2023.
What they're seeing is that zones ON the Appleton fault or east of it... are part of a steeply dipping structure parts of which were filled with a network of intruded rock deposited from solution, that correlates with the orogeny of the deposition being driven by fluids flowing up from deep in the earth, flowing up through the layers of rocks in the subduction zones occurring at the plate boundaries in continental collisions. But, on the west side of the fault what they're seeing... is either those once formerly steeply dipping zones have fallen over and are now laying almost flat near the surface... or else the fluids coming up from the deeps ended up puddling in those zones near the surface west of the fault.
Either way... it redefines and separates the mining project into THREE basically different problem sets... call them type 1, 2 and 3...
One is that type 1 deposits lying west of the fault are ridiculously cheap and easy to mine... being thick zones of almost flat lying structures... some zones from 30 to 60 meters thick... occurring from surface to depths of "not very deep"... a whole lot of it defined as less than 130 meters deep. It means those are "no brainers" for early development by open pit... very low cost mining at shallow depths, giving quite large intercepts of "very decent" but essentially lower grade values... only with occasional stringers of over an ounce per ton nuggety stuff incorporated into the lower grade mass. The length of holes vs the lower value grades defines it as "that's a profitable mine". The fact it spans the scope and scale it does... "Wow. That's a good sized profitable mine." That it is all very shallow... cheap to mine... "more profitable than most". That it also includes some big time high grade here and there ? "Oh, come on... that's ridiculous"...
And, that's not just one "ridiculously good" mine being defined at Keats West, in a 305m x 315 m zone all less than 200 meters deep... , but now also the SAME THING being shown at K2 and Monte Carlo:
Melissa Render, VP of Exploration of New Found, stated: "Exactly one year ago today, we announced the discovery of Keats West ( September 27, 2022). At that time, there was little understanding about the prospectivity of the west side of the Appleton Fault. Through aggressive drilling in just 12 short months, Keats West has transformed into one of our most significant zones, spanning 305m long by 315m wide. This discovery has proven pivotal for New Found, changing our perspective on the west side of the AFZ and leading to the discovery of several additional gold zones in this domain such as K2 and Monte Carlo."
So, that's great... but, as I noted... its only ONE of the three issues in "basically different problem sets":
The second problem set...type 2... is exactly the same as the first one, in practical terms, not in geology... exceptional in that the layers of rocks aren't cooperating by lying down flat. So, on the Appleton fault itself, and to the east side of it... there are similar zones of mineralization as on the west side... mixing low grade zones with some portions containing much higher values... only, the rocks are not lying flat on the surface... but are sticking down into the ground at some variable angle... maybe between 20 to 40 or 50 to 70 degrees... following the dip of the subduction zone down into the depths. What makes that "exactly the same as the first" problem set in practical terms... is ONLY that the emergence of that angled structure at surface... happens at the surface. Almost all the drilling they've done thus far is poking at rocks from the surface down to a couple hundred meters at most. So, the Keats Zone... as it is now defined... is made up of those rock layers sloping down into the earth... where they poke out and are exposed at the surface. The shallow extent of the drilling being conducted... just as in the first case... is defining deposits NEAR SURFACE... and thus very amenable to cheap and easy mining by open pit... only, in the Keats Zone, with more of an ability to focus those surface mine development efforts on areas of more concentrated expression of high grade mineralization. But, because of the variation in rock layers, and where the fluids flowed in them, and the angles of the layered structures... and the chaotic nature of the "webbing" in the network of rock that was deposited from the fluids flowing up from below... think of it like the formation of a river delta as the fluid flows up nearer to the surface... it makes it much harder to quantify the actual distributions of the values... just as you would have difficulty defining "how much net" was there if you tried to define the percentage of space occupied by a net by drilling holes in it... while not really knowing what angle its presenting to you... as nets (like flow patterns) don't have to lie flat to make it easy for you to obtain statistical relevance in the effort.
But, that's the definition of a technical challenge in quantifying more specific distributions and variations within smaller areas... (the width of a drill core and rocks in near proximity) which isn't the same thing as defining ranges in variation in statistically relevant "average" grades over larger areas... which is easier... if less exciting to report... when high grades here and there are smeared out over larger distances with "more" in the mass of lower grades. But, since you're mining from surface in an open pit because its cheap and easy... its really the total distribution of all values within the entire mass of rock that you care about... as that's what defines the profitability of the mine... not the size and richness of the best of the nuggets found.
Its more of a problem if you try to focus too much on defining "the value" as a function of zeroing in on distribution in the high grade... instead of recognizing that it is the low grade, still, that defines the outline of an open pit mine that's worth the cost and effort in mining. And, the high grade occurring within the footprint of that limit defined by the economic limits of the pit being defined... just an extra shot of flavoring added to the sno-cone.
The high resolution seismic... might provide utility in the shallow zones if it is able to provide something that can be interpreted as a statistically relevant view of the nature of the net... by picturing the fracturing or the density of the webbing in the "river delta" as the flows near the surface. The Keats zone drill cores... and the close look and mapping of the surface of the rocks that have had the over-burden removed... compared to the seismic based model of structure in depth... might enable developing that view. I would guess it would show up in the data... with proper interpretation... less as a crisp photo of a network structure... and more as a "blurry patch"... in which the density of the cloud created by a network of smaller fractures filling one rock with a network of another... would prevent sound propagation producing interpretable reflections... rather than "a patch of noise"... And, then, differentiating one patch of noise from another... might prove useful.
So, thus far... we have two differently considered zones in which to develop open pit surface mines... leaving us with the third "basically different" problem set...
And, that is the point at which things get interesting... when you consider it as... all of the drilling done thus far, while proving up great value (that is easily accessible and cheap to mine) has been "scratching at the surface"... and hasn't even begun looking for "the good stuff" yet... which is what the type 3 problem set is about.
Following the slope of the subducting slabs down deeper into the earth... where higher pressures at depth constrain the ability to push the rocks around... gets you less "river delta" the deeper you go... and instead, as you go deeper, you get greater depth in the concentration of the flows in the main stem of the river. Except, rivers are more constrained in their geometry... by having one surface that is flattened by gravity. Even, then, though... rivers tend to have shallow zones in which the faster moving water spreads out more widely across a rapids... and other places where the water pools and grows deep, and moves slowly... as happens behind a dam.
Deposits of the same "epizonal" nature as this one... as Quintin Hennigh first identified it, and defined it as a proxy of Fosterville, (and still compares it to Fosterville, "only better"... which remains to be proven... in the third of our "basically different" problem sets)... Epizonal deposits have a well known tendency to have grades increase with depth... as at Fosterville... and, in parallel, increase in grade with changes in the associations with the other minerals being deposited.
Noted a reference to stibnite, recently... interestingly, in a release detailing the K2 deposit as a "west of the fault" style deposit, and thus a near surface and "flat lying" deposit like Keats West... only "bigger" at 410m long x 395m wide. The gold mineralization begins at surface and has been drill-defined down to a maximum depth of 250m.
But, then, they add“The introduction of stibnite at K2 provides one additional curiosity; high-grade concentrations of stibnite are commonly observed at Fosterville near to high-grade epizonal gold zones. Through further drilling, we look forward to seeing if a similar association presents itself at Queensway. Exploration will remain focussed on expanding K2, which remains open in all directions and at depth, where limited drilling has been conducted below 150m vertical.”
That's interesting... but it also gets us to the point... that the near surface "flat" deposits and the deeply dipping deposits have "some relationship"... that is yet to be fully defined. The low angle thrust faulting of the west side deposits means they're "migratory"... sliding along the surfaces below them... and who knows how they might slide in relation to the other things below them...
But we have two practical concerns with that relationship... one in elucidating the geology and figuring out "what's where"... and another in elucidating the optimal design of mine structures to get the most gold for the least cost... That's easy enough in the type 1 and type 2 considerations... build open pit surface mines
The biggest problem that creates... in the type 2 situation... is that there's then some interface that occurs, between the end point at depth in the bottom of your open pit... and the need to continue following the same deeply dipping structures further down into the earth... past the "river delta" into the main stem of the river... still without having all that stuff in the bottom of the pit falling down on top of you.
That's one benefit of the seismic... is that it should help develop a plan for conducting mining at depth that prevents losing value in the rocks you want to mine, because you find they're needed to sustain the structures you need to build the below ground mine.
But, better... the seismic should also guide your effort in drilling holes to enable a less random effort in finding out what's down there... It will allow you to target specific rocks and specific structures you already know are there... while eliminating a whole lot of waste in drilling holes in the blind... trying to test structures you can't see... at increasingly greater depths.
THE BIG ONE...
The "type 3" deposits are likely to be the biggest and the most valuable... and they haven't even started looking for them yet ?
Its the right approach... because surface mining is less costly (less capital intensive, and thus less dilutive)... and faster... so it should be the first focus. But, also, because... waiting until the seismic is available... will make exploration at depth vastly more efficient... and "concurrent" exploration and mine development both cheaper exploration, safer mine development, and far less random in both.
But, having a great plan for exploration and development... doesn't answer the questions:
Do grades increase with depth ? How high do the grades go ? How deep does the gold continue ? What do the "wide spots," "dams" or "bends in the river" look like. No way to know without drilling to see. How will grade change with depth in this deposit... compared to others ? Same answer. Don't know yet.
But, the holes drilled with the seismic in hand should help being to answer those questions quickly... and with a lot less effort wasted drilling deep holes in the blind based on chance...
If it works as well as it might... I doubt the market is prepare for what it produces...
And that could be a lot of fun...
But, maybe this deposit doesn't give grades that increase with depth ? Maybe it increases in grade with depth... but has all of that concentration occurring closer to the surface than in other similar deposits ? The shallower slope of the Appleton fault structure compared to others... matters how ? More gold... shallower... or more gold strung out over a longer distance ? But, the company controls what to look at first... and which questions to try to answer in context of the "big picture" understanding...which just isn't the same thing as... which questions to answer based on "does this work to pin point "big numbers" in "finding" in deeper holes ?
Things are likely to begin getting interesting... perhaps even with the first holes drilled using the new information generated... but almost certainly, with a learning curve applied, by about the middle of next year...
And then, assuming that effort proves "it works"... Drill a few holes from surface to define the "sweet spots" and the limits of deposition... using it the same way they do in oil exploration... looking for "dams" on the river... or "trapping structures"... defining limits at the edges and defining what's there where deep pools accumulate... where larger masses of slower moving fluids drop vast quantities of gold... filling up those huge underground caverns with solid gold just waiting for us to find it ? Yeah. Don't expect that. And, no reason to worry about that in others, it seems... as no one is paying the least bit of attention, just now.
And then... with the mechanics of it proven... you can, instead of doing more of that work from surface... use the seismic modeling to ensure less of need to continue peppering the landscape with a large grid of deep holes drilled from surface to greater and greater depths... at greater and greater cost. When you know the basic structure of the rocks and of the ore deposits within them... and know where you want to build mine structures... you can get a jump start on mine construction... and save a lot of money on drilling... by doing less of it from the surface, and more of it, with much better focus... over much shorter distances... by drilling from underground.
They're mapping the surface of thee Keats Zone right now... and processing the seismic data. And, they're planning on integrating those bits of work into a new and "very high resolution" model (relative to what can be created without pairing those bits of information)... and are planning on using it guide them in drilling new holes... before the end of the year.
And, at some point... someone might notice... |
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| To: sense who wrote (4016) | 10/2/2023 4:58:17 PM | | From: sense | | | | I wonder if they could benefit by adopting another oil industry technique...
Directional drilling makes sense in the oil patch... why would it in mining ?
Drill down a 1,000 feet... to punch a hole a few inches wide into a structure you want to test... and you might not get close to a valid test because of bad luck in where those few inches were placed...
Or, drill down 800 feet... and then punch a splay of five or six holes into that same structure... which will do a much better job of characterizing it ?
It might not make as much sense to do that if drilling "in the blind"... and it might make more sense to do it when you already know what the structure is well enough... and you just want to get a little better bite of it to get a better taste... |
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| To: sense who wrote (2429) | 10/2/2023 8:17:14 PM | | From: sense | | | | NFGC... a quick look based on Keats West... musings on its "value" and its actual utility... and Fosterville
In the post this one responds to... I did some paper napkin calculations on a valuation for the Keats Zone... then "guessing" it was worth $6 to $10 billion (or, say, 3 to 5 million ounces "near surface" at Keats) based on the "rough" outlines then available. Might be worth revisiting that, again now, with a couple of years more effort applied in drilling to better define it... but, pointless, essentially, as the key issue in the value at the Keats zone is... "open on trend" and, particularly, "open at depth"... with it a known that the bottom is a long way down.
Keats West is more constrained in its geometry... so, a quick bit of pencil work and... given the constraint on the geometry... I just used their numbers in 305 meters by 315 meters... and an ore body 30 meters thick...
That's already known to be wrong... because a lot of their low grade intercepts are of 50 meters or more... but, OK. The simple math there says: count it as the known to be undercounted mass in 2,882,250 cubic meters, one gram per ton being roughly the same as one gram per cubic meter, just divide that number by 32 and you get ~90,000 ounces for every gram per ton in the average. Using only the Sept 27 release...
3.29 g/t 42.35m,
2.19 g/t 37.30m,
1.73 g/t 24.00m, and previously reported 80 m away
42.6 g/t 32.00m
The widths of low grade holes average to 34, a bit (12%) over 30m... the grades average to... 2.55g/t/m
So the low grade holes alone, if they were the right number to use for the average for the whole deposit, would deliver ~230,000 ounces in Keats West...
But, then, average in the high grade intercept... and you get something like 12.5 g/t/m average...
And that would mean 1.125 million ounces... and a clearly viable, low cost, and profitable dig...
That variation also shows clearly enough the nature of the problem in averaging in high grades and low grades... and the problem of having too few data points... So, I went and looked at the other Keats West holes reported... and they're mostly higher grades, in the range of 5 to 8, or 15 to 20 grams, over intercepts that trend longer and lower, or shorter and higher... but if you normalize them to the 30 meters... 20 grams over 15 meters still means the same as 10 grams over 30 meters... All that look does to the prior bit of math... is skew the numbers higher... as the lower grades dilute into the larger number of higher grade holes... and then that "higher base" still has to account for and include the outliers in the highest grades... which skew the averages... along with the actual quantity of gold and the value of the deposit...
You can't take that to the bank... as that's still not yet a fully defined potential... but... the trends are apparent enough... the odds are it will only grow larger over time as the boundaries are pushed out, and as what's inside them becomes more fully defined with infill drilling...
As as that effort is made to expand, define, and better include everything inside the boundaries... that amount of gold proven will grow... and so will awareness of the particular portions of it that can be attacked to produce the most value, fastest, for the least effort and expense...
Simplify it and call Keats West a million ounce deposit... at $1800 gold and $600 costs... worth $1.2 billion dollars without applying any discounting... and I don't think that's crazy talk...
NFGC's market cap today is closing in on half of that, at $695 million...
But, not the point I'm making... which is instead that if you mine that silly cheap slab of gold laying flat out there at Keats West... that's a billion dollars of dilution you can avoid in funding the development of Keats... which is worth 6 or 10 times that much...
Or, if they quit exploring today... and spent the remaining cash they have to develop Keats West (or, obviously, "scratch the surface" at Keats)... they'd lose a few years of time... but would end up not diluting the shares... and having 10 times more money in the bank than today...
That's the same model you do see being applied at Seabridge... where the huge capital required to develop KSM has them at risk of being diluted into oblivion, or losing control of the project, if they try to fund it...
So, instead of financing it directly... they keep exploring... and as they do, they also continue moving the project incrementally toward "starting" to develop it... all while financing all of it themselves using internally generated funds won from operating their other, smaller, and less capital intensive gold mines...
And, because they're doing that... they can be patient, and they can say NO... and just keep funding themselves along the path to development... reducing the need for others money to get them to where they already are... developing at the pace that allows that, without worrying about hurrying... And, that way, they come out way ahead... and, particularly as now, avoid the need to raise money at market lows.
I think that's an even easier approach to things at NFGC... where the costs of development and mining are about as low as you will find... unless you're re-developing a mine that someone else already build for you...
Keats West is one such well defined potential west of the fault... and perhaps not the largest of them...
But, there are as many or more such potentials on the fault itself... with higher values at/near surface... and deposits that continue to depth... Develop Keats in the same way... and its an open-ended 10 billion solution... that in turn will pay for development to get "more"... but we don't have any indications yet of "how much more" there might be... deeper.
That's coming, soon... perhaps...
And... there's the point... they're NOT doing that now... but continue exploring... slowly homing in on the effort, coming soon, to start drilling holes targeting deeper structure below the couple hundred meters they've been poking holes in...
I can think of only one reason why they'd do that... instead of working on developing some portion of what they have now...
So, while no one knows, now, how much gold NFGC has proven up, or how much they might end up finding... [and they appear to be carefully avoiding making any effort of the sort I am, here... that might get them close to crossing lines in declaring quantities or "values" before they complete NI43-101 compliant reporting]... its worth nothing that they could easily be doing that work, now, too... And they aren't...
Gvien what they've already found AT SURFACE... presenting the lowest cost, highest grade, easiest mining you can find anywhere... with enough gold shown already to make it obvious they can be self funding... and have (easily more than one) low cost mines with "plenty enough" gold... it still looking likely that each "spot" they've poked at may well prove to hold over 1 million ounces per at or near surface... but, the type 2/ type 3 spots... at depth... likely hold WAY more.
"Better than Fosterville"... means Hennigh believes... a bigger company maker than for Kirkland Lake.
I think so too... Fosterville is still wide open for exploration... and is proving higher grades as they go deeper... but, the recently reported proven of 2 million ounces... at an average grade of around 21g/t...compares with what they had in 2017, when it was 1 million ounces at 17 g/t...
I guess I haven't heard anyone describe... that comparison with Fosterville in more specific terms than in the parallel in the geological comparison. How does the initial exploration effort compare, here versus there ? How do the holes reported here stack up versus there ? How does the scope and scale of the effort made compare ? I don't know those things... but it would be interesting to find out...
But, the very pedestrian bottom line in mining... isn't about the eye watering values in big intercepts... it's about the eye watering cost of getting the ounces out of the ground...
Seabridge's KSM has already proven a lot more ounces... and with that, a $6 billion cost to develop it... and an ongoing reality that mining far from civilization is expensive... and will always be expensive.
NFGC's primary competitive advantage... if not as the biggest... will be as easily the most profitable mine. |
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| From: sense | 10/2/2023 10:17:15 PM | | | | | | RMLFF / GDRZF Status Check... and the "Dog Ate My Homework" defense...
This link includes "Creditors' Efforts To Enforce Judgements Against Venezuela Remain on Hold "contains a current overview...
Citgo Drama Continues as Court-ordered Sale Date Nears
Venezuela: ConocoPhillips Targets CITGO as Opposition Authorities Try to Stall Auction
The Dog Ate My Homework Defense: The last link notes... Venezuela as PDV Holding or PDVSA now claims to have lost their share certificate for CITGO... thus making it impossible for the share sale to proceed. And, they say, they need to extort a $40 million payment to fund a bond to cover their liabilities in relation to the transfer "should the original certificate surface". I suspect the Chancery Court in Delaware will find that argument both entirely unconvincing, and also no obstacle to the court directing the creation of a replacement certificate to be held in trust by the court...
Venezuela has appealed some technicalities to the U.S. Supreme Court... which has not yet responded to take up the case... and probably will not... given the clarity of the law on point, and the well reasoned decisions underpinning the case...
The U.S. government, as the State Department, first, and then Treasury in alignment as it relates to control of foreign policy decisions... have stood down from continuing their prior obstruction of the court directed sale of assets, which is required to fund the rightly decided arbitral awards.
The sale process is now expected to begin in October... it technically tomorrow, 3 Oct, in terms of the initiating the bureaucratic elements in management of the sale... but with the first actual sale of shares not intended to occur prior to the 24th of October, with sale events then continuing through to a conclusion in July of 2024. It remains uncertain in what degree any particular sale event relates to the distribution of funds to provide any particular award.
The awards are based on sales of shares of CITGO with proceeds being used to fund the court directed transfers as required in meeting Venezuela's outstanding obligations... and they are met in a time based sequence with priorities defined by time lines on which claims were filed, or the arbitral awards were granted. Rusoro is defined as seventh in line in that process... which positions them early enough in sequence that the sales of CITGO shares should fully fund the court directed payment to meet specific defined obligations.
The question of the value of the CITGO shares has been of concern, as perhaps if the prices are too low many of the awardees will be left without sufficient funds to back a payment if the shares sold bring in too little to cover payments required to pay those ahead of them in line... It has been claimed (by Venezuela) the value might be as low as $10 to $12 billion... not enough to cover any awards beyond the first tier... but, while the numbers of claims have ballooned up to $23 billion... 5X EBITDA would be $25 billion. However, the shares are being sold by the court in a defined process... not flogged by brokers to customers... and its unclear, of course, who is going to bid for shares... or how much they might be willing to pay... given there is not a public market for them.
I think that the court awarded number owed to Rusoro is perhaps different than the number that came out of the arbitration... which was $1.2 billion... with accrued interest amounting to over $1.8 billion. I think the court directed figure was $1 billion... but, it should, of routine, also include unpaid interest... although if that larger number (including the interest) is included without direct reference wasn't made clear in the discussions I read.
Given the current (recently enlarged) outstanding, that should result in an award of somewhere between $0.88 and $1.68 per Rusoro share.. plus interest, perhaps... still down considerably from what was previously considered as likely... with the uncertainty driven both by not knowing how the lawyers are getting paid... by direct percentage of the award or by award of shares... and whether the recent ballooning in the numbers of shares are related to that allocation... or due insiders padding their take as it gets closer to award.
Still, from current prices... IF those numbers are correct... shares at $0.31 today... should be an easy double, at least, and perhaps more... barring any other wrinkles emerging to prevent the sale of shares proceeding.
Still lots of uncertainty... although the window on the IF seems it is closing pretty rapidly now... we should see that aspect resolved within the next three weeks... still leaving questions about "when" and "how much"... and, of course, how much of any of that money that is paid... filters down to the value of a share, or to payments made in the form of a special dividend paid to the shareholders...
This link... addressing the issues in relation to Gold Reserve... and "our approximately U.S. $1 billion judgment (inclusive of interest)"... points out that they are 11th in sequence... a bit later than Rusoro, at 7th... while Rusoro's discussions of award amounts have generally been "exclusive of interest"... while separately noting the value of accrued interest owed. So, perhaps Rusoro's award will be a bit larger...
"According to public records, there are 10 judgments for which writs of attachment have been granted and for which the motions were filed before the Company’s motion. These judgments, according to the Delaware Court’s present order, represent an aggregate principal amount of U.S. $4.684 billion, exclusive of interest."
That also appears to answer the question about interest added to the judgements... as the values "exclusive of interest" suggests that interest will be paid... and that should enlarge the size of the claims to be paid out to others ahead of Gold Reserve... somewhat increasing their risks...
It is likely, still... that there will be ample funds to ensure Gold Reserve gets their $1 billion...
It leaves unresolved questions about the sales process... and how the conduct of that process extended over time from October to July... relates to the timing of disbursement of the funds to the claimants...
I will try to determine that... before we get the point where sales actually begin... |
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| From: sense | 10/3/2023 4:11:33 AM | | | | | | Copper Contango... worst since 1994 ?
If copper prices fall to where they were in 2002 or 2008... adjusted for inflation, today that would be $1.07 to $1.81... or, it would be if you believed the average rate of inflation over that time was 2.5%...
China real estate getting ready to cliff dive again... didn't win the medal on the prior attempt... and, somehow also failed to miss the pool... ?
It has been CHINA's economy, over the last decade and more... and not the U.S. or the rest of the world... that has been driving commodity consumption... and, that remains true today... as it is Chinese buying EVs and not Americans buying EV's that is driving the consumption of battery metals, today...
As China contracts... producers of commodities whose prices are dependent on China's consumption... are going to feel it...
From the bottom in December 2001 (a low of .666) to the next high at $4.16 in May of 2006... 4.5 years
From the 29 June 2008 peak at $3.88 to the bottom at $12.25 on 21 December 2008... 6 months
From the bottom in December 2008 to the next high... $4.60 on January 30, 2011... two years and a month.
I'll call it... $2 on the first of March 2024... maybe back to the current price in March of 2026... assuming the global economy isn't a smoking ruin by then...
But, note... in recession, copper prices fall, interest rates fall... and gold rises in anticipation of future inflation as rates are forced lower, and money printing is used trying to salvage the economy, by shoveling the money out of helicopters...
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