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GOM fundamentals: ( CashCost any opinion???)
You are going to start hearing about a lot more juniors that have been totally off the radar for years. While lots of people are studying the tea leaves and trying to determine why gold went down and now why it’s going up, actually it’s a lot simpler. Commodities peaked in 2011 and corrected. Everything went down, not just gold and silver. Gold actually went down a lot less than most commodities. The bigger the bear, the bigger the bull.
I was contacted by the management of Gold Dawn Minerals (GOM-V) a couple of weeks ago who wanted me to look at the numbers for a recent option they took out on a couple of gold mines and a mill in Canada that they are in the process of raising $10 million for. The numbers seem quite convincing. The project they call Greenwood Gold mine has an NPV of $32 million, a capex of $9.5 million and an IRR of 61.5% after taxes with all in cash costs of producing gold of $820. The payback period is under 2 years, which is incredible.
Golden Dawn intends to raise the $10 million via a financing consisting of a debenture paying 8% with a common share and a warrant for an additional share at $.40. The price of the unit is $.15 Canadian apiece. The debenture has a five-year maturity and is fully secured by all of the assets of the Greenwood Gold project. The debenture holders may request payment in gold at a price of $1295 per ounce USD after holding the debenture for three years.
It sounds like a pretty good deal if you agree with me that after a four-year correction/crash in the price of gold we have seen the bottom. If Golden Dawn made this deal a year or two ago, it would have been a problem but it’s far easier to raise money today than it has been in years.
The Greenwood mill and mines originally cost $40 million. The PEA shows an all in cost of production of $820 an ounce. The shares doubled from $.07 in January to $.15 in February before making a perfectly normal correction to the current $.095. With a market cap of under $6 million Canadian and near term production in the cards, Golden Dawn offers gold bugs a cheap lottery ticket with a nice potential payoff no matter if they invest in the financing or simply buy shares near the yearly low.
I don’t own shares in Golden Dawn but I am biased. The company is an advertiser. Please go to their site and review their material and news releases. It’s a pretty simple story and you need to be responsible for your own investment decisions.
Golden Dawn Minerals
GOM-V $.095 (May 11, 2016)
60 million shares
Golden Dawn Minerals website
Bob Moriarty
I don’t really have a strong opinion but I don’t like this…
Golden Dawn intends to raise the $10 million via a financing consisting of a debenture paying 8% with a common share and a warrant for an additional share at $.40. The price of the unit is $.15 Canadian apiece. The debenture has a five-year maturity and is fully secured by all of the assets of the Greenwood Gold project. The debenture holders may request payment in gold at a price of $1295 per ounce USD after holding the debenture for three years.
There are many a garbage juniors that have rallied strongly but if one looks under the hood, they might as well be selling gold at low prices forever with some of the deals that they have made to stay alive. A name that comes to mind is Banro… BAA.