How can anyone not believe there would be dilution. I sometimes wonder why people invest in mines, when they don't seem to realise how capital intensive it is to take a mine from being a prospect to a producing mine. Next year when the BFS comes out and the company needs to raise $200 Million for construction, does anyone really think there won't be more dilution? Of course there will!
The mine has a relatively low electrical demand - its maximum demand is 4MVA. If there was likely to be power shortages in the area (Which doesn't appear to be the case - the site is 200KM from Joburg), it could easily be managed with generators.
While the Tungsten price obviously has an impact on revenues, what needs to be factored in, that most people seem to fail to take into account is fuel costs. Energy is normally the largest cost element of any mining operation, especially Open Pit operations where the fleet consume a huge amount of Diesel, since the DFS was published in 2011 (Red Diesel was costing 83p/litre then), the cost of red diesel has reduced massively (Currently 52p/litre) and looks set to fall lower. That could result in a 20% reduction in Operationl Expenditure!
30% price increase, pre-trade, could this be a good day?
So we're looking at a 20% ore reserve increase WITHOUT the Southern extension (which I can't see not having permission granted for), with no increase in Capex and what should bring a lower strip ratio. That has to be worth 3p on the share price surely?
Its not so much production starting in April as start of wet commissioning - basically running the mill up and optimising for the run of mine head grade, this process will output an amount of concentrate but not the production volume once the plant is fully commissioned. I would be amazed if the open pit is developed enough in April to feed the constant ore supply that the production mill will require.
The company are beter letting this drag out longer in my opinion, when the unioinised miners realise that they aren't getting anything out of it and only losing money, they will lose faith in the union. Bending over to the unions demands would open the company up to massive future problems.
I don't understand why people are getting excited about either Ebola or the current gold price (Ebola in particular). Ebola is not going to have an effect, unless we're saying its going to wipe out the population of West Africa - which its not! And the price of gold today (Or in 3 months time for that matter) doesn't matter a jot, its only relevant when you have a producing mine. Prices are cyclical and I would rather mine construction started in a trough rather than a peak, for the simple reason it only has one way to go. If the feasibilty study factors in the price at the trough, the resulting NPV is worst case scenario whereas if it is based on high gold prices and the prices go down, the whole project is threatened.
From what I can figure, its not stated whether a buy is asell, instead it is calculated by the price of the transaction. If someone bought a large volume at a discount, this may show as a sell