You have two "if's " in this post moosie.. That is two, to many for me..
Think that " GOLD " ... Could possibly go below $1000.. It is being manipulated as always IMHO.
Disc. Never touched the stuff..
Printable View
I just hope they offer to shareholders some of this 5m when they raise rather than the Aussies who tend to raise all the money for this company.
While companies fall over at the current price this little gem is well insulated and has a second run with Congo.
Looking forward to seeing the Congo project data released.
I haven't commented on this stock for a few years, but one of my pet hates are mining project NPVs that have been overstated by using crazy low discount rates.
10% is prettty much the cost of capital of a stable property trust. Applying the same discount rate to a mining project which has additional financing risk, development risk, commissioning risk, production risk, and obviously commodity pricing risk is a huge risk factor. So to adopt 10% is IMO bizarre, but NTL is not alone among companies using this discount for gold projects.
If you really wanted to get any sort of comfort around the NPV you would generally need to see all the sensitivities of the NPV to the various gold prices, and adopt a discount rate of at least 18% to 20%.
Also need to be aware that C1 costs (and development costs) are so low as intention is to toll-treat, so significantly reducing operating margins.
To give an idea of value attributed to these small scale gold operators, ORS on the ASX is producing from multiple sources, AND has its own production plant (valued at $15m), yet has a market cap of just $12m.
Steve
Not sure 10% is that far off for a lower risk boutique mine. I would agree on the initial scoping study be previous managment but clearly the new team are working on a mineable to expansion scenario. ORS is an ambitious existing open pit producer having to resort to earning by processing A1 ore as its can only chug out 6500T at 6-7G/t. Not sure where you got the plant refurbishments gave them a 15M asset. CLearly the market doesnt believe that. With 1.x in cash and a major decline going on its a different kettle of fish and has a much higher per oz cost and is like measuring apples to watermelons.
18-20% is a little on the crazy high side. Financing doesnt seem to be that much of an issue for Heritage/NTL and they have continually stumped me with their ability to raise cash. Development risk on an existing on ore set of tunnels already developed is less than an open pit on greenfields sites. Commissioning risk I assume relates to a plant which is fair but they are likely to toll treat in imo. Production risk based on the info I can find suggests that with existing addits and on ore resources getting the ore out wont be an issue.
Clearly it will be the Bankable feasibility which shows the way for this little goer and hopefully the variability will be ironed out as it is important to remember its a PRE FEASIBILITY which is more accurate than the scoping study but 10-12% usually off what the bankable would be.
Cheers
Bullish
Holding NTL, NTLO, NTLOA
DYOR
The shareprice ticking along nicely, but perhaps hasn't moved enough to interest big purchasers yet. A bit of extra info at the tail end of this report from NZResources today.
Quote:
Pre-feasibility shows “robust” economics for Talisman mine
19 April 2013
The pre-feasibility study for the historic Talisman gold-silver mine at Karangahake at the base of the Coromandel Peninsula showed the mine could deliver a cash surplus of $23.4 million in its phase one development.
New Talisman Gold Mines Ltd (NZX & ASX: NTL) said in releasing the report yesterday that re-establishing a mine showed there were robust C1 cash costs of $US588/ounce and C3 cash costs of $US1,075/oz.
The pre-feasibility showed that in the initial five year start-up, Talisman would generate $68.2 M in revenue, with an initial capital requirement of $5.4 M.
Peak annual output was projected at 12,115 oz of gold and 36,000 oz silver.
Commenting, executive director Matt Hill said: “This finding is a very positive step for the company’s plan to re-open the Talisman mine in the world class Waihi gold district.
“The pace of work has stepped up so that the project can get underway once detailed mine planning and permitting has been concluded. The development initially of a small low impact high grade gold mine sets the platform for the exploitation of target areas for future phase two developments”.
Previous underground drilling and sampling delineated a resource of 204,760 oz gold at a grade of 6.9 grams/tonne and 798,840 oz silver at a grade of 27 g/t.
The mining operation examined in the pre-feasibility study involves only part of this resource, generating income with an aim to develop an extended operation. The measured resource was 212,500t @ 5 g/t gold for 34,000 oz and 27.5 g/t Ag for 187,900 oz.
Hill said work by the company identified several additional target areas contained in both remnant areas within existing workings and strike and dip extensions of the Maria and Crown-Welcome veins. Of particular interest was the Mystery vein, which has not previously been mined and which lies between the Maria and Crown-Welcome vein systems.
“Establishing that the new target areas contain economic mineralisation will require opening up of existing tunnels and new development within the underground mine as well as further exploration,” he said.
The company intends to fund this work with a small scale mining operation, focussed on the immediately available measured and indicated resources.
The projected cash surplus of NZ$23.4 M would come from milling 106,500t at a recovered grade of 9.4 g/t Au and 30 g/t Ag. A total of 32,200 oz of gold would be recovered along with 102,800 oz silver.
The Study found that the new mine plan is “conservative and achievable” with relatively low risk and would generate an internal rate of return of 83% and the payback period would be 2.5 years.
Gold was initially found in alluvial material at Karangahake, near the Talisman mine workings, in 1875. Shortly after, a gold vein was found at nearby Mt Karangahake and ore was being removed from the Talisman, Woodstock and Crown mines by 1880.
Crown, the last of the three mines to remain in operation, closed in 1928. About 37 kilometres of mine tunnels exist at Talisman, and 3.5 km have been recently explored.
Chairman Murray McKee said the mine development strategy set out in the report makes sound sense. Targeting the resources that have the highest level of confidence and are closest to the existing underground access reduces risk.
The study analysed a range of options on mining method, materials handling and backup services. The immediate development focus would be on resources adjacent to the accessible 8 Level drives.
On materials handling an option analysis was carried out on installation of rail bound transport systems underground compared with deployment of a fleet of small, rubber tyred loaders and trucks. Results demonstrated the flexibility of a trackless fleet, which would enable extraction of the resources below 8 Level through a series of small ramp systems.
For the initial five years plan, peak production was projected at 35,000 tpa for 12,000 oz gold per annum in years 3 and 4.
For ore processing, several options for processing included non-chemical gravitation separation, flotation and cyanide leaching.
Costs included in this study reflect the capital and operating costs for a dedicated CIL plant. The company was awaiting results of test-work undertaken by Auckland University and intends to embark on a bulk sampling programme and further metallurgical test-work to inform detailed design of the ore processing flow-sheet.
New Talisman was also holding discussions with a number of local gold producers to investigate the potential for a toll treating agreement. The mine is less than 10 kilometres from the Newmont Waihi Gold mill in Waihi. However, discussions in the past on toll treatment with Newmont had not progressed.
felsic intrusion...sounds dirty
Felsic rocks are rich in minerals like quartz which are light in colour, and an intrusion is just by definition... if my memory serves me right atleast (correct me if im wrong)
:t_up:
......and you watch your mouth BULLS**T......Ive held this stock longer than your dick probably isnt! And yes Im still a holder BUT NOT a holder of breath.........in fact I cud take every buyer out in one swoop if I wanted so YOU get your facts right buddy or you might find I'll do just that for the hell of it!!
[QUOTE=GR8DAY;402610....in fact I cud take every buyer out in one swoop if I wanted so YOU get your facts right buddy or you might find I'll do just that for the hell of it!![/QUOTE]
I had to look up NFI. What would taking out every buyer do? Just drop the price temporarily? Its sort of hard to fly in the face of the research... Just wondering.
Hahaha I love the banter on this thread - it's way more exciting than the boring old Ryman thread.