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DEG - De Grey Mining

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Updated presentation out.

The easy money was made on this some time ago but I'm in it for some future upside due to resource expansion that might not be factored into the sp and potential large player interest in buying them out, although it would be a huge transaction, along with expected POG break up at some stage.

Recent drilling all points to the PFS mining parameters expanding considerably. Could possibly go to the 15Mt pa mill option and producing 6-700Kpa.

Screen Shot 2022-02-10 at 9.56.17 am.png
 
This infill drilling is excellent but I'm more interested in extension drilling. We already know they can mine this with what they've got, but putting it into the 10Moz category should change the mining metrics for it and could put it into the top 2-3 mines in Australia.

So, 128m@1.5g/t 100m underneath the scoping study pit at Diucon is significant. They're going to need a bigger pit. Looks like it's just going to get deeper too. Just need to keep the higher grades to make it worthwhile to go underground.


Screen Shot 2022-02-15 at 9.50.51 am.png


Screen Shot 2022-02-15 at 9.55.59 am.png
 
One of a group of three (CHN, DEG, RTR) with similar circumstances and potential for further price gains.

All three are sitting on potential tier 1 resource assets that require a lot more exploring and delineation. It's going to take years to fully understand the extent and value of their resource. Another year to plan a cost efficient mining operation and years more to construct a production facility if that's their intent. It's highly likely that one or more will sell their resource before production.

These are not the sort of stocks I want to buy at higher prices. I prefer to buy the dips and profit from future news reports.

DEG: Price has been in a range for quite some time. I would prefer to buy this nearer the 1.10 level which is the price of the most recent cap raise. Although at 1.25, price is in the middle of a much larger range (0.9 - 1.65). I would be concerned if price dropped below 1.00.

deg1802.PNG
 
peter2 said:
One of a group of three (CHN, DEG, RTR) with similar circumstances and potential for further price gains.

All three are sitting on potential tier 1 resource assets that require a lot more exploring and delineation. It's going to take years to fully understand the extent and value of their resource. Another year to plan a cost efficient mining operation and years more to construct a production facility if that's their intent. It's highly likely that one or more will sell their resource before production.

These are not the sort of stocks I want to buy at higher prices. I prefer to buy the dips and profit from future news reports.

DEG: Price has been in a range for quite some time. I would prefer to buy this nearer the 1.10 level which is the price of the most recent cap raise. Although at 1.25, price is in the middle of a much larger range (0.9 - 1.65). I would be concerned if price dropped below 1.00.

View attachment 137827
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Yes, this is going to take years to get to production, especially with the complication of the oxidisation process to be added. Plus, it seems like they're just going to keep drilling and drilling until they get to a point where the resource seems to have maxed out. On the bright side, the infrastructure already in place - roads and power running through the property and close to a port, will be very beneficial.

I personally wouldn't mind this going back under a dollar. That would simply represent a great buying opportunity to me. Unless, of course, something else changes in the gold outlook. Like it crumbles to a level where it's not economical to spend a billion on capex.
 
Sean K said:
Yes, this is going to take years to get to production, especially with the complication of the oxidisation process to be added. Plus, it seems like they're just going to keep drilling and drilling until they get to a point where the resource seems to have maxed out. On the bright side, the infrastructure already in place - roads and power running through the property and close to a port, will be very beneficial.

I personally wouldn't mind this going back under a dollar. That would simply represent a great buying opportunity to me. Unless, of course, something else changes in the gold outlook. Like it crumbles to a level where it's not economical to spend a billion on capex.
Click to expand...
Nice movement DEG nice movement indeed
 
Sean K said:
Yes, this is going to take years to get to production, especially with the complication of the oxidisation process to be added. Plus, it seems like they're just going to keep drilling and drilling until they get to a point where the resource seems to have maxed out. On the bright side, the infrastructure already in place - roads and power running through the property and close to a port, will be very beneficial.

I personally wouldn't mind this going back under a dollar. That would simply represent a great buying opportunity to me. Unless, of course, something else changes in the gold outlook. Like it crumbles to a level where it's not economical to spend a billion on capex.
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I was hoping for that price to revisit and likely it will be, matter of time.
 
Fairly boring results compared to their other discoveries. Need some wider hits and/or grades. I suppose it shows that there's more to be found on the property.

Screen Shot 2022-05-03 at 10.27.36 am.png
 
DEG have chosen the POX option to put in the PFS. There's no mention of changes to the scoping study Capex which was around $900m, so it must still be in line, or close to. They wouldn't want that number to blow out too much, although they have some excuses with inflation pressures. I'm still sceptical on the price of the circuit due to other mine Capex using POX. Maybe it's OK due to only needing to run 0.8Mtpa.

Screen Shot 2022-06-16 at 11.56.39 am.png
 
This is going to add quite a lot of ounces to Diucon, but not sure if it's high enough grade at depth to go underground. The stuff over 5g/t for sure, but 1g/t UG, not so sure. Looks like it's getting wider at depth which is interesting.


Screen Shot 2022-08-01 at 10.20.53 am.png


Screen Shot 2022-08-01 at 10.21.08 am.png
 
The PFS is due in the Sep Quarter so just a few weeks time.

Since the June 21 MRE and the Scoping Study the resource has grown significantly both along strike and depth, particularly Diucon and Eagle. I don't think the last significant intercept 200m under Diucon made the cut off for the PFS so we'll have to wait for the DFS for that to be included next year.

With the additional resources included in the PFS I reckon we'll see a substantial increase in the projected ounces per year and LOM. Should be over 500k oz pa for past 12 years as a pluck. Maybe out to 15 years. So, this chart below should see the bars higher and further out to the right.

The Scoping Study on the 2021 resource gave this a pre-tax NPV of $2.8b, so with the additional production and mine life that should go up substantially.

Currently trading around the $1.4b mark. I'm not sure if the additional drilling success over the past year has been factored in to the current SP. Obviously have to find around a $bill for the Capex though.

Screen Shot 2022-08-26 at 11.51.53 am.png
 
rcw1 said:
Good morning Rabbithop,
rcw1 still trades DEG extensively. Not holding at the minute though.
Have a great weekend.

Kind regards
rcw1
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Good morning. DEG have been good for me, remembering the running with WAF traders. Will be picking up more around 70 to 80cts next week. Only my opinion n hope. I had stopped trading it n switch to PLS. Another Good one for me. Restricted retiree pocket money, can't spread too widely trading.
 

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