Sandstorm has a gold stream agreement to purchase 15% of the life of mine gold produced from Deflector at a per ounce price of US$500 per ounce of gold. Sandstorm will make an upfront payment of US$38 million to acquire the stream.
Interview with John Robert Greeve, Managing Director at Mutiny Gold Ltd. - Recorded at the Frankfurt Stock Exchange in Dec 2012 (Uploaded Jan 20 - 2013)
Good interview (most of an update or company pitch) .. . key points noted down from the interview. ..
(i) Currently resource of around 750K ounces of gold - company thinks there is huge upside and has a target of around 2.5 million ounces of gold ..
(ii) New Drill program starting in Feb 2013.
(iii) Company expects low cash cost of around $600
(iv) Initial production target is 70,000 ounces - in year 3 - production will be ramped up to 105,000 ounces of gold. If resources are indeed what the company thinks they will be - then the production will be ramped up to 200,000 ounces
(v) All permits are in place and a week before the interview in December - Mutiny has finalized the details for their project finance package:
- 50 million from bank project finance
- 43 million from Sandstorm
- 11 million from equipment leasing
Now Mutiny is fully funded to bring the project into production
(vii) Initial mine life of 7 1/2 years. The company believes that the mine will stretch out over 20 years (due to the resources moving up). Company will be profitable from the first year of production for around $40 million.
(viii) Compared to other companies who are producing around 70,000 ounces of gold (in australia) - their market cap is around $500 million. Mutiny's market cap is around $50 million currently and company expects big upside (As an aside - Sandstorm holds 22 million shares of Mutiny valued currently at $2 million)
(viii) Mine construction has started - construction contract has been issued to G R Enggineering Service which is one of the premier quality enggineering service company in Australia. They have a fixed cost lump sum contract so that there are no surprises.
(ix) 50,000 ounce hedge put in place in Nov 2011 at an average price of $1,847 compared to lower gold prices currently (If not anything else - shows that the company hedge the gold price very near the top of the gold price in 2011 - management is smart).