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[checkmate28]

GWA.v GWSAF Gowest Mill deal breakdown, plus Checkmates valuation info

Broken down Gowest gets 50% ownership in a mill with a capacity of 1500 tonns per day. Has operated at 2000tpd in the past.

Payment One:
38,590,604 units including 38,590,604 shares and 19,295,302 Warrants

If the warrants get exercised at .165 this brings $3,183,725 cash to the company.

Payment 2 :
Northern Sun has the option to receive $5.75M cash or $5.75M in discounted shares, that if exercised at today's price, would amount to another 38 Million share dilution.

Total possible dilution 96.5M shares. Going to be less because Gowest shares going up.

Facts and pics of the mill:
http://northernsunmining.ca/Redstone-Mill/Redstone-Mill-Overview/default.aspx


Gowest bulk sample should average about 10gpt head grade with the ore sorter and is permitted for 30,000 tonnes. 10gpt x 30,000t =300,000g Au / 31gpo = about 9677 ounces gold extracted for revenue of $12 Million at $1250 Gold

Current GWA Bulk sample permit is for 499tpd. At 10gpt, they could produce 50k Oz/yr still leaving 1000 tpd capacity at the mill. Pre Feas calls for sub $900 AISC with toll milling.

AUMN Golden Minerals gets approx. $4.4M net revenues for leasing 400tpd capacity to Hecla Mining
Don't know how this deal correlates to the Redstone setup, but its good info to know. Potentially if Gowest used half the mill, and JVco leased the second half to someone else, there should be no cost to JVco from Gowest as it would be a wash.

With a full commercial mining permit, Gowest could potentially process 150K oz from the Redstone Mill at which point there would be a payment to JVco of which Gowest is 50% owner.

Since Gowest has no payments on the Orion mine financing for 27 months, its possible, that Cash flow and warrant revenue could make those payments, along with the additional sustaining CAPEX therefore requiring no further dilution. I assume that is the goal. That's the beauty of efficient mgt and a low CAPEX project

While this is a lot of dilution, Gowest got a smokin deal on a newish, nearby, state of the art mill, that suits their current and future need. The best part is, the mill is ready to go Now. No 2 years waiting or $60 M cost.

Harte Gold HRT, Gowests neighbor, just finished their bulk sample while Gowest is in earlier stages. They trade at a market cap today of $312 Million. If Gowests MC was the same, and Gowest diluted shares rose to 400M, Gowests share price would be .78 or more than triple the current share price even after the dilution.

Harte gold skipped some steps, moving forward with only a PEA (no PreFeas, measure or indicated) containing a resource of about 450k ounces in the Indicated and inferred. They just raised $20M to drill drill drill. What their looking to do, is raise their resource to a couple million oz and sell to a major for big bucks. Harte still has to raise money and build a mill, and hope to be commercially producing by mid 2018.

How does Gowest compare? Gowest spent the money up front and has an official NI43101 resource of 1.25M oz or triple what Harte has. Additionally, Gowest has reserve ounces that are equal to the entire Harte indicated and inferred. Its going to take Harte a long time, lots of $ and dilution to catch up. With Gowest having the mill completed, they may even leap frog Harte to commercial production.

As I always post, Gowests entire 1.2M oz resource sits on just 1% of their land position. It has about the largest strike in the Timmins camp, 1300m, and is open on strike and at depth. There are 17 other targets with the Bradshaw Geo signatures with some partially delineated. They have 22km of contiguous connected rock, in a previously undiscovered area of Timmins. Timmins ON has produced half of the historical gold from the abitibi belt. Its resource is previously undiscovered, because yesterdays technology could not find the gold under the heavy overburden. Today's technology can. Gowest and Greg Romain were smart enough to see this out front. They spent years collecting the 110km land, efficiently drilling, and positioning them for the future.

Use your imagination here. With the job Gowest has done to date moving the company forward in a share holder friendly manner, you can see why this is my largest position. If it weren't for the Ontario mining authorities sitting on Gowests permits for 4 years, I would have been correct here a long time ago. And Remember I tried hard to get you all in at 5 cents and more recently at .15

If I use my imagination, I see Gowest ironing out smooth commercial production and profitability, then quickly moving towards mid tier Timmins producer status and probably getting bought out for a 10 figure number.

Checkmate28