Phoenix Gold - PXG

[yabster]

Nice quarterly - sp getting a good bump. DFS on track for December.

[JBmurc]

Now looking back couple years ago I sold the last of my PXGOA holding @ 14c (25c ex price)=39c

Yesterday I brought back in @13c (should have waited another day !!) 12c close today

Hard to believe -- Gold of course a major driver of the SP over the last couple of years being round $1600oz AUD to at present $1380
PXG planned AISC $950-$1000oz AUD


From June Qtr report

HIGHLIGHTS
• Total Resources of 3.80 million ounces of contained gold1
• Total Reserves of 1.16 million ounces2
• High grade drilling results received from Castle Hill Stage 2
• Long term milling agreement executed with FMR Investments
• Staged development plan progressing, mining to commence in September Quarter
• Entitlement Offer completed raising A$4.3 million, together with additional shortfall placement of $4.7 million subsequent to Quarter end
• Total funds raised, including successful institutional Placement in March, of A$16.8 million, fully funding staged development and transition to sustainable gold producer

[arc]

I agree.
Looking at other players in the field there appears to be some behind the scenes activities going on. ASL and MAH have both sprung into life and there has been talk about others using this "down-time" to purchase more digging rights for upcoming expansion.

[JBmurc]

Pouring first gold from the Kintore West open cut is a milestone for Phoenix Gold as it progresses development of the Castle Hill Stage 2 Project in Western Australia. The mine is the first of four mines that will produce 85,000 to 90,000 ounce of gold over an initial two years and generate net cash of A$10 million - A$12 million

Buying more @ 9.3c

[JBmurc]

.Good Gold surge last night ...PXG profit margin est heads
towards $600oz AUD
yet the market values reserves at only $40-45oz AUD ...how much do you think a predator would put on the same Gold reserves in such a prime location ?
From 1994-2004 Gold M/A boom many majors were paying even more than the gold price Vs the reserves of gold ... just a few from the "ResourceStocks" mag

-Barrick brought homestake 2001 gold $273oz Acquistion cost as % of spot 117% !!!!!

-Tamami brought Coyote 03 gold $392oz ----- 77% of spot

there was like 60-70 major M&A from july 94-Nov 03 the average Acquistion cost 94% of spot av. gold !!!

Now of course today Gold sector is nothing of the 94-04 period ....even though Gold moved much higher M&A values didn't keep up ....

PXG has 1.1moz Gold reserves and growing .... If we only take 20% of spot gold for PXG Gold reserves we get $343mill AUD I'm guessing most if not all of the M&A of the 94-04 period would have included producing Gold mines ...so lets take of 100mill from the value ..

243mill sounds fair to me ?? 60-65cps ?

[JBmurc]

I see OBS is being offered 180mill for their 2moz high grade west african deposit ....PXG 4moz lower grade but far better location in the heart of the Gold fields only worth $36mill

Anyone on here selling not happy with PXG getting 6mill more cash @10c

soon enough we will have three income streams ....really about the worst time to exit

[slimwin]

Not selling, but a long way to go to break even...

[JBmurc]

Yes my fair T/O value PXG at AUD Gold price is in the mid 50c ....next round of drill results should give us a good boost if the grades are higher be good to see the mill grade over 2g/t(currently1.7g/t) ... think it will all come together here very soon and see 2015 as a great year to be holding PXG

Worth a read-http://www.visualcapitalist.com/global-gold-mine-and-deposit-rankings-2013/

[slimwin]

How do you come to that value though JB?

[JBmurc]

How do you come to that value though JB?

Well I took PXG JORC Gold reserves gave them a 20% value at present Gold price then removed 100mill for CAPEX to see PXG producing the planned 100koz p.a ... then divided the amount by the amount of shares (this is revised down on the new 6mill raising)

I gave nil goodwill or cash at bank value .....so thats way I give mid 50's fair value

Of course you could say maybe PXG Gold reserves/operation is only worth 10% or 30% of the present Gold value (less 100m etc)

To put into perspective from 1997-2004 the average value of the over 80 odd Gold miners T/O & mergers was 70% value Gold reserves to Gold price (resource mag Aussie)