MGV - Musgrave Minerals

[Sean K]

They talk about the aspiration to build a mill but I doubt that they are looking for that outcome although I could easily be wrong. But just looking at the Spectrum Metals (SPX) takeover bymRamelius Resources to gain the Penny West deposit which was 355,000 ozs @ 13.8g/t grade but that, while not exactly deep, was deeper than MGV resource. Moreover, SPX's tenement with Penny West was 150 kms away from the Mt Magnet mill whereas MGV's resource is only about 30 kms away with a nice direct road by the looks. Ramelius has done a lot of acquisitiins and this one seems obvious if price is ageeable. If not, there are other potential acquirers. Am 'researching' now, probably buying on Monday or next week.

Grades of 10g/t above 200m would be very interesting to any nearby producers I'd reckon. Low hanging fruit.

Interested here as it's 6% of LTRs portfolio.

 

[finicky]

Enthusiasm cooling off now. At this price it is as if a t/o is already factored in. Won't go into my rough calcs unless it's needed but agree that a $219m market cap for 262kozs resource is over the top if only considering the gold resource. Firstly they have a 30,000 mtr drilling campaign going on, secondly they claim to have identified a new 7km gold 'corridor' splaying off the strike line that Break of Day is on. They also have 20% of the copper resource at Hollandaire - total is 51k tonnes Cu, so say 10kt of Cu to MGV. Then there is also the Lake Austin jv with EVN where they have very wide low grade intersections. So don't have an idea how all these would add to value.

There are so many things that would not be the same but if using the acquisition of Spectrum Metals by Ramelius as a very rough guide my calcs are that RMS paid $585/oz of resource for Spectrum's Penny West. MGV's market cap currently values its gold resource at $836/oz.

Will watch

 

[Sean K]

There are so many things that would not be the same but if using the acquisition of Spectrum Metals by Ramelius as a very rough guide my calcs are that RMS paid $585/oz of resource for Spectrum's Penny West. MGV's market cap currently values its gold resource at $836/oz.

What did RMS actually pay for Spectrum?

I'm not sure how this added up to a price per ounce.

Spectrum Metals Limited in exchange for 1 Ramelius Share for every 10 of Your Spectrum Shares plus $0.017 cash for each of Your Spectrum Shares

 

[finicky]

My calc used 0.15 per SPX share paid in RMS shares plus cash. Then I multiplied by 1,386,000,000 SPX shares to get $208m. Didn't bother with options/perf shares as only want a basic figure. Then divided by $208m by 355,000 ozs of gold resource (Penny West).

 

[Sean K]

My calc used 0.15 per SPX share paid in RMS shares plus cash. Then I multiplied by 1,386,000,000 SPX shares to get $208m. Didn't bother with options/perf shares as only want a basic figure. Then divided by $208m by 355,000 ozs of gold resource (Penny West).

I suppose they could have paid unders for Penny West and might pay overs for BoD I guess.

Do they have capacity to add tonnage to the nearest mill, or would BoD just extend availability?

Westgold has a mill just as close, might be a good bolt on for them too.

They have stated their strategic aim includes M&A.

Will be interesting to see who makes a play.

 

[finicky]

I suppose they could have paid unders for Penny West and might pay overs for BoD I guess.

Yes, I can't really make a meaningful guess. As said, my crude comparison doesn't try to take into account the other assets or prospects each comparable (SPX and MGV) have. So RMS might see extensions to the BoD trend as valuable potential or the splayed off newly identified 7kms "gold corridor". Then the jv with EVN.
RMS seems the most likely suitor but I have no perception as to whether they need more time to digest what they have already acquired - it all needs capital and attention to develop. The MGV chart is so tempting.

 

[finicky]

Wonder if this (below) is significant - a mining engineer appointed to the board recently (Feb 2021) who has experience at Mt Magnet and its Checkers mill that now belongs to RMS 30 kms down the road. Made me more iffy about whether MGV is serous about the scenario of mining the resource itself. I still don't think so for the current resource size they have and with a geo as M.D but then they describe the identification of the aforesaid new 7kms "gold corridor" as "changing the paradigm".

Brett Lambert
BAppSc (Mining Engineering) (Non-Executive Director)

Mr Lambert is a mining engineer and experienced company director who joined the Company as a Non-executive Director in February 2021. He has over 35 years’ involvement in the Australian and international resources industry encompassing mining operations, project development, business development and corporate administration.

Mr Lambert is a graduate of the Western Australian School of Mines and commenced his professional career with Western Mining Corporation in 1983. He was a member of the senior management team at WMC’s Mt Magnet gold operations that initiated the transition to large scale open pit mining and construction of the current Checker processing plant.

Post WMC, Mr Lambert held executive roles with a number of junior and mid-tier resource companies where his responsibilities included overseeing several greenfields resource projects through feasibility study, development and commissioning.

 

[finicky]

Oh well took the bait, in for 10,000 shares @ 0.405
Didn't include the Lena deposit in the calc: that's another 325kozs Au @ 2.3g/t
So much for my research prowess.
Also they have assays in the lab for 7 diamond holes at Lake Austin, the EVN jv. Results predicted for June.
Too much happening not to have a taste.

 

[finicky]

The current resource estimate for the Cue Gold Project totals 6.4Mt @ 3.2g/t Au for 659koz comprising:

- the Break of Day deposit (797Kt @ 10.2g/t Au for 262koz contained gold) and
- the Lena deposit (4.3Mt @ 2.3g/t Au for 325koz contained gold) located 130m to the west of Break of Day

Yeah, I know they don't exactly add up but can't be bothered to find out why.
So to amend with a revision, that's now a market capitalisation per oz of indicated/inferred resource:

$220m ÷ 659kozs = $334/oz

Plus very strong looking exploration prospects on the BoD and Lena line, the new splayed off 2.6kms of mineralised of strike containing 'Big Sky' and then there is the EVN jv on Lake Austin.

Held

 

[Sean K]

So to amend with a revision, that's now a market capitalisation per oz of indicated/inferred resource:

$220m ÷ 659kozs = $334/oz

So, that looks pretty good when comparing to previous takeovers for a relatively easy bolt on. I suppose it comes down to the nearest mill capacity. The 10gt in under 200m would definitely be a priority compared to some of the other stock they're carting in. I saw somewhere that RMS had problems with one of their mills last quarter. Not sure if that's a short term issue for them in chasing additional ounces.

 

[finicky]

I'm buying. For the above reasons. Didn't change a sitting bid @ 0.39 so that filled. Bidding for 10,000 more @ 0.365

 

[finicky]

Interested me that the placement and SPP that was issued in January was priced at 0.36, i.e. higher than the lowest buy today. The SPP was closed early due to being capped at $2m and already over subscribed. Placement was for another $16m. Bid in for more @ .355

 

[Sean K]

These results are OK at Big Sky. Quite a lot of assays pending. Will be interesting to see what comes out of Target 14 as it had a number of hits with grades above 4.5g/t. Numbers looks like it's got quite a bit of gold in it as well.

 

[finicky]

Feel the width (Hal Todd)

Some objections to the result descriptions from a couple of self described geos elsewhere which are confusing but it feels very prospective to amateur me, more so when they will be looking for the source of the mineralisation of the broken up, not far from surface, rock that they are drilling so far. They have 50 more hole samples from this session that are still at the lab. A follow up RC program of 15,000 mtrs extensional drilling is planned as well as diamond drilling into basement in late June. News flow.

Separately from this they have the first diamond holes (7) from the Lake Austin jv with EVN at the lab.

My waiting bid @ 0.355 was hit at the open, maybe I lucked out, if I get a rise in price I might dump the tranche @ .405

M.D Quote: "The near surface nature of the oxide, regolith gold mineralisation is expected to be favourable for open-cut mining ..."

 

[finicky]

Feel the thickness. Up twenty dollars against my average buy price if it closes @ 0.38 today. It's just the beginning, probably $100 in a year or two if I don't go for the quick gains. Patience.

Looking for the 'hot spots' in the 2.5kms of 'regolith' mineralised strike containing 'Big Sky' prospect and we all know what regolith is (1) Trying to zero in on possible shoots in the fresh basement rock for diamond drilling. Assay results pending and drilling ongoing.

(1) regolith

/ˈrɛɡəlɪθ/
noun
GEOLOGY

1. the layer of unconsolidated solid material covering the bedrock of a planet.
   
   
   

 

[Sean K]

Feel the thickness. Up twenty dollars against my average buy price if it closes @ 0.38 today. It's just the beginning, probably $100 in a year or two if I don't go for the quick gains. Patience.

Are you aiming too high?

I note MGV is in LRT's portfolio. 2nd highest at about 6%. Average entry 0.077, so they're doing ok. They've been picking some winners the past year or so.

 

[bk1]

Kennas, Slide 5 of the LRT presentation contains that graph curve that you have mentioned before....
Or it looks very similar.....

 

[Sean K]

Kennas, Slide 5 of the LRT presentation contains that graph curve that you have mentioned before....
Or it looks very similar.....

Yes, that's what LRT have modelled their approach on. The Lassonde Curve. Get in during early discovery.

 

[Sean K]

This has really come off since June. Been a steady flow of results and some quite significant one's like this now at White Heat only 150m down. Needs some length to make it really worthwhile I suppose. Big Sky is still producing results. White Light will add ounces too. It's all adding up.

Doesn't seem to be any plan to get an updated resource out there any time soon. Just drilling for the rest of the year and prefeasibility studies.

MC down to about $154m. Looks tasty at that price for those grades near surface.

 

[finicky]

Just infill drilling results but great grades at White Heat, 300 metrs south of Break of Day. White Heat does not have a mineral resource estimate yet. Is open "down plunge".

Last week more infill results at the Big Sky prospect showed good continuity - B.Sky also not developed enough yet to be included in an MRE.

I'm finding it hard to be motivated to post lately due to underperformance of all my specs, most of what I read turns into cognitive mush for me. Also feel I can't buy anything and must conserve cash because I fear a crash - ergo interest in the share market has slackened off drastically. Why look in a cake shop if you're sick of cakes and cant buy a cake anyway?

Held