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Tagged with: Independence Gold

Dec 2001 - Independence Gold

Independence Gold NL (IPO Raising $3.5m) – Has significant upside potential from the rights to WMC’s Southstar database – SPECULATIVE BUY at 20c

  • Independence Gold NL (IGO) is offering 17.5m shares at 20c by way of an IPO. Over-subscriptions of a further 2.5m shares could increase the total amount raised to $4m. Within 3 months of successful listing, all shareholders receive 1 option (details to be announced post listing) – for - every 2 shares held.
  • IGO has an associated relationship with Ranger Minerals (RGS) who provided the initial seed capital of just over A$1m for which it received 15m ordinary shares in IGO (which with the 1m contribs is expected to be 28.8% of the total shares issued of 55.6m).
  • IGO has 5 joint ventures covering a suite of metals namely gold, PGE’s and base metals, of which the most advanced are the gold projects. The JVs are Chesterfield, Goldsearch, Randles Find, Southstar, and Dolphin.

Jul 2002 - Independence Gold

Independence Gold NL (IGO) – Long Nickel Acquisition is part of the Aim to Create Substantial Shareholder Wealth

  • The Southstar Database is offering IGO a plethora of opportunities for the creation of individually focused companies.
  • The purchase of WMC’s Long nickel mine for $15m under the separately managed Lightning Nickel Pty Ltd is part of IGO’s aim to create substantial shareholder wealth.
  • Based on mining only Long and Victor South’s ore reserves of 750,000t at 3.6%Ni for 27,000t of nickel, at a rate of 150,000tpa, IGO’s Nickel management team (headed by Tim Moran) has estimated a 10% NPV of $46m for their attributable nickel. This was based on $60m in after tax cashflow over 5 years, using a nickel price of US$3.15/lb (US$6950/t), and an A$ exchange rate of US55c.
  • In our opinion, the 27,000t of Ni should be capable of being exceeded since it excludes almost the same again in the Long orebody’s resources, additional recoverable ore from the pillars (even allowing for geotech), and any possible exploration discoveries.
  • Lateral thinking by the IGO team following conceptual viewpoints outside of standard theory has resulted in evaluating two promising 100% owned gold prospect areas called Jeerinah (near Paulsen’s) and Yalgoo West, where initial results have been encouraging.

Feb 2003 - Independence Gold

Independence Gold NL (IGO) – Long Nickel Mine Acquisition Could be Significantly Profitable for IGO

  • IGO’s wholly owned subsidiary Lightning Nickel Pty Ltd bought WMC’s Long/Victor nickel mine for $15m on 17 Sep 2002. This was based on IGO’s estimated return of $60m in after tax cashflow, from producing 27,000t of nickel over 5 years (treating 750,000t of 3.6%Ni ore reserves at 150,000tpa) and receiving a nickel price of US$3.15/lb (US$6950/t), and an A$ exchange rate of US55c.
  • IGO ramped up beyond their targeted production rate of 12,500tpm (150,000tpa) inonly 3 months (by January 2003), and are also achieving 10% to 15% highergrades than expected of >4% nickel (due so far to less dilution than expected).
  • Long’s life appears likely to be at least 7 years all probably at greater than an average annual grade of 4%Ni. This is based on our site visit observation of progress to date, the driving towards Gibb South and new extensions there, probably a favourable decision on Victor South in 2003, the current mining rate of 34% in resources (outside of reserves) and additional remnant mining,
  • The geology appears to be so complex that it is virtually impossible to put strike limits on the orebodies, resulting in a strong probability of extensions to them within the lava channels. There also appears to be at least 3 possibilities of finding new unmined orebodies : either within the existing channels, below the Long lava channel, or there could be a link between the Durkin orebody (to the northwest) and Long as shown in figure 6 on page 4.

Aug 2003 - Independence Gold

Independence Gold NL (IGO) – Hitting the Jackpot !

  • On 7 August 2003, we visited IGO’s Long Nickel mine and its new underground development at Gibb South, with a small group of brokers, analysts, fund managers, and the media.
  • Initial grades had been regarded as relatively disappointing in the 5% to 6%Ni vicinity, compared to the drillhole intersections at about 7% to 10%Ni, but IGO had recently encountered a horizontal “seam” or lode of massive ore averaging 21%Ni (some samples are ~27%Ni). This seam was observed (by us) to be about 10cm to 2m thick, overlain by up to 1.5m of disseminated 4%Ni, as shown in Figure 1.
  • This latest nickel mineralisation is clearly bonanza, jackpot-style. However, the prize is perceived to be Victor South which has widths of massive ore up to 30m of 3% to 7%Ni, and a number of 10m at 10%Ni drillhole intersections. Development production could start by June 2004 after completing the remaining 1.8km to be driven in the improving ground conditions towards the south, by April 2004.
  • The budget forecast for 2003/04 is 150,000t at 3.3%Ni and should be the worst case scenario since the grade has been reduced by 10% from the 3.6% expected (based on the feasibility study of an average ~3.45% from Long, plus sweeteners). There is 2,000t of Gibb South on the ROM pad at 6% to 7% Ni, and the production tonnage may also have been reduced by 10% with 41,000t treated in JQ03.

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