In any respect, the company has already resumed mining, though it will need to finish the tailings dam wall before it can start mining in earnest. I'm expecting an earlier rather than later decision. Looking at the chart, the stock has already broken out from the 9c resistance, and we can expect this stock to get to 11c, before it will face some selling pressure. The resumption of mining will be the news that 'propels them' beyond 11c.
The company is capitalised at just $68 million, despite having:
1. Some $35mil in cash - less the cost of earthworks
2. The capacity to produce mine output of 70,000 oz per annum until they move underground
3. Exploration upside - there is appealing targets still
I've not performed a financial valuation of the company, since I'm only looking for a short term trade from the stock. Long term investors will need to look at the cost demands of the transition from an open-cut to underground operation. The gold price is the uncertainty. There is little reason to fear inflation; but we must also remember that gold is a 'stable asset' class in these times of high 'yield-valued' commodities. When you have high asset prices, gold is by default, the only asset class that is under-valued. Of course there is emerging market property as well. We actually think there is more upside to asset prices generally, and that we are destined to see a succession of 'mini-bubble bursts' if you like....as opposed to a 'whomper bust'. The fundamentals for the global economy are actually pretty good.
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