#OXS Whats being arbitrated over……
I thought folks might like to actually see what Oxus Gold
says has been stolen from them by the Uzbeks. A figure of between $500m and
$1.2Bn is massive for a gold explorer/miner isn’t it?
Well we have two license areas being arbitrated over, Amantaytau
and Khandiza.
Amantaytau.
This is a large mining open pit operation. Situated next
door(40km) from the world’s largest open pit gold mine. Back in 2011 it was only recently started, producing 50,0000 oz’s a year, The plan was to increase this to around 300,000
by 2015. Current gold price over this time of 1200-1300, average costs per oz
where around $200-250, giving $1000 a profit per oz, so 50m a year profit,
rising to 300m a year now.
Total reserves of 2.5m oz rising to 7m with the then current
increased exploration program, with an estimated 24m oz of gold and 480m oz of
silver contained in the site in recoverable state. The world’s 10th
largest goldmine is 29m oz’s, so you can see the global scale of Amantaytau.
All before it was seized by the Uzbeks, when they realised
that the price of gold had shot through the roof.
On the picture taken in 2014, you can see the large vehicle
depot, with many diggers, dump trucks etc (when you zoom in) and the very large
processing centre.
Amantaytau is a fully functioning operating and highly
profitable mine, with massive world class gold reserves, Oxus spent over $80m
on the site. Amantaytau (AGF) should be pretty easy for a minimal value and I can’t
believe that even Tim Hart has given it a very low valuation.
Khandiza
This was at the feasibility stage and is a multi commodity
resource. With a JORC of 1m tonnes of zinc, 500,000 tonnes of lead, 125,000
tonnes of copper, 62m oz of silver and 176,000 oz of gold.
Current price of zinc alone is $2000 per tonne so $2bn.
Grades were generally very very high and highly profitable.
Total potential resources in Khandiza where around 5m tonnes
of zinc, over 2m tonnes of lead.
Analyst of the 2014 picture seems to show small scale mining
has started in Khandiza, which is very surprising, or maybe not….
Estimates for Khandiza by OXUS for the arbitration range
from $72m to $588m depending on how they want to value it.
There is little doubt that Khandiza, if mined would provide
an mcap of $1bn to any company.
With both of these two resources, it’s clear to see just how
world class and huge they were. Nothing really on AIM at the moment compares
and it’s certainly not a silly inflated award being sought in the arbitration.
It’s also difficult to see how the Uzbeks could value both resources together
at a value that wouldn’t endow OXUS will a multiple multi-bagger from its
current level.
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