"The only reason we have mines is because people need the products. Gold's not just used for a shiny ring ... it is for everything from space travel to cellphones."
If they're looking at 800 tonnes of ore a month, and 27g of gold per ton, that's 21,600g of gold a month. If gold is worth $40/g that's $864,000/month or about $10m pa at retail value of the gold.
According to the nzx website market cap of ntl is $32m. So currently a forward pe of about 3.
What do you expect the pe to be if they pull all this off? Say, 12? That's tripple your money if it goes all exactly to plan, and they can sell the gold at $40 a gram.
Its not massive for that level of risk. I would guess a more likely pe would be 6 because no growth prospects beyond that success. So could be double your money on success or half it on failure. Same odds as the casino. Lol.
I would expect that it is just the beginning. They can take out 20,000 cubic metres per annum which equates to about 50,000 tonnes. Mt Karangahake has been mined but it would be fair to say that there would be significant deposits of gold left. Then there is Rahu which is thought to be an extension of the structures present in Mt Karangahake. Time will tell but hopefully There will be considerable upside. Gold is currently 1900 NZ$ / oz . With processing and mining costs at about 800$/oz that will be about 1100$/0z profit or about 9m$ profit per annum. It is high risk but probably due to the politics rather than the mining. Will we ever see a high PE on this share - probably not but politics aside it could potentially be a good little earner.
This quarterly is not one I'm looking for surprises on. Could be comments on drop in NZD/USD being beneficial perhaps? Realistically just good solid progression into full sampling/processing would be all I hope for. In particular further on the pilot plant and production - further to the below.
"All components of the pilot processing plant, have arrived and are currently being installed offsite. It is expected the plant will be fully installed and operational with the crushing and grinding circuit by end of December with first production of gold from stockpiled ore by year end."
- from the HY 14/12/2018
If there are surprises it may relate to Rahu, but not expecting any.
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