I have received the
SPP offer documents. Note to management, it was raining inside my letterbox , it would have been better sealed in plastic.
We are each invited to cough up a maximum of $15,000 for some new shares at 1c. Is this a good deal? Note that only 100 shareholders deciding to take up the full offer will meet the $1.5mill needed to be self funding in gold recovery from then on, if everything goes to plan.
The grade of the ore that will be pulled out will average
12 g/tonne. If they mean that there will be little waste ore, this makes a lot more sense than the GEL operation at Drybread, something that I have to admit up front, cost me plenty.
At Drybread, where they also used mechanical methods to concentrate the gold, the grade was more like 0.4g/m3, or 0.2 g/tonne. They had to dig several metres down to find the 0.5mtr wash layer. It became an
exercise in futility with small-scale gear and some untrained staff.
NTL thus has a huge advantage. They can follow the veins, leave all the rubbish metal underground, so they only need to u
se skilled operators with small-scale equipment, and link up with Newmont, who as a large gold producer looking to extract some more cashflow in the meantime, must be the party they are talking to.
They will be pulling out 650 tonnes a month of ore, at 12g/tonne it's 250oz of gold a month, over $400,000 p.m or $5mill a year. At a polite 40hr week, the extraction is about 3.6 tonne an hour, or 1.5 m3 an hour. This doesn't seem too daunting. They'll need to transport about 30 tonnes a day to Waihi. Also not too hard. One truckie, one on a digger part-time, two inside the mine? They might be first concentrating the ore at the mine itself, in which case my figures would be wrong. A lot less transport costs, but more equipment costs. With high grades I'm not sure why they would bother. Unless they need to feed the material in well up the chain at Newmont's mill.
I will be tempted to free up $15,000 to check the investment out. New Talisman might be hoping the slide in the gold price doesn't continue, because at the moment I can buy shares on market for about the same price as the offer. This won't help their coffers. But there is no future incentive with the offer (like a fixed price warrant with an expiry date of 2 years or so). The closing date is just 25-26th Sept. There is helpfully a direct credit bank account number, ready for the funds.
If it was my bank account waiting for a topup, I'd be putting out some good news quite soon.