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Last edited 4 years ago
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#Bull Case
stale
Added 4 years ago

The Blue Spec acquisition announced today was underrated by the market. It offers high greade refractory ore that can go through the small sulphide circuit being built at Warrawoona. Circuit originally built for the small Copenhagen deposit that is mined over 9 months. Potential to add years of high grade mining inventory for the circuit. Given higher grade, running 100ktpa through it could add 30koz+ p.a. on top of the existing mine plan. Thus, rather than doing 85koz p.a. LOM from mining Klondyke and just running through the mill as per the PFS, could see a few years running north of 120koz p.a. as sulphide circuit gets a better run. Blue Spec is not ore to blend to lift grade through the mill, its feed to better utilise and get value out of the sulphide circuit. Paid about $90/oz in ground and likely to produce $1000/oz+ in cashflow for each one they pull out.

#Business Model/Strategy
stale
Added 4 years ago

Announced a JV for nearby tenements. Prospective for copper/gold porphyry type targets with interesting historical workings. Cheap option for the company to progress. Outside of that, resource update due June 2020 qtr and DFS still on track for Sept 2020 qtr. Remains a compelling little gold developer in a gold bull market. The stock will go up a lot more all else equal.

#Bull Case
stale
Last edited 4 years ago

CAI has a good little asset that will have an initial 6yr mine life but likely to be 10yr+ with a little exploration success along strike and at depth. Bull market in AUD gold should see favourable funding outcomes achieved. The ASX's sub 150koz p.a. cohort has been very hit and miss in the last 5 years so management is going to be key. Team is good overall and lead by an MD that did the feasibility and project dev work on 2 of Africa's largest platinum mines (Zimplats, Afplats mines) which are successful producing mines to this date still. Feasibility should be highly robust and accurate thus I consider the likelihood the feasibility will be gamed or BS as low. DFS due 4Q CY20 and is devised from bankable quotes, thus once it is done, and funding is secured, ground can be broken asap. Little downside from here as NPV is $0.30 at USD1250/oz on a fully diluted basis. Upside ranges from +0% to +500% on scenario analysis, with base case at ~200% for now (USD1700/oz for 6 years producing from CY22).