>Doesn't seem like you can put together a gold mine with good grades,good management and the right amount of funding. <
I own quite a bit of CMM but I like YNG.TO better, which I own more of and seems to fit your above criteria.
YNG is the result of YGC merging/taking over Queenstake. They are aiming to produce 400,000 oz per year in 2-3 years time. 300,000 oz per year from Jerrit Canyon @ under $400 oz and 140,000 from the new Ketza river mine in Yukon @ under $300 oz.
With SP at $1.30, market cap is currently $200 million and they have around $65 million in cash after their recent PP financing at $1.80. They are going to invest some of the cash into turning around the Jerritt canyon operation and increasing its mine life by drilling for more reserves.
Couple of dated writeups on YGC from 2006 (these were premerger so they don't talk about the Jerrit Canyon mine):
Monday, September 25th, 2006 at 11:03 pm
YGC Resources - High Potential Gold Play
By goldguru
YGC Resources has to be one of the most underestimated gold miners on the market. They fly under the radar of many goldbugs, due to a lack of effective public relations. But the management of YGC has a core competency in producing gold, not producing slick marketing campaigns. This is good news for anyone reading this article and getting in before the resource update shines a light on the value and potential of this little Canadian miner.
YGC Resources is focused on the discovery and development of gold ore deposits in North America. The company holds a diverse portfolio of gold, silver, zinc and copper properties in the Yukon Territory and British Columbia in Canada and in Arizona in the United States. The primary focus is the exploration of its 100%-owned Ketza River property, which consists of 308 mineral claims and leases, a gold mill from past operations and all associated equipment.
YGC has an estimated 1.8 million ounces of gold resources and is expected to be bring the Ketza River property back in production in 2008. They have the cash necessary to move towards production, having recently closed $8.25 million in a private placement. This has been followed by a series of announcements detailing promising drill results. An updated resource estimate will be carried out as part of the pre-feasibility study due for completion by the end of December 2006. We expect these results to surprise even the most optimistic predictions and send the share price rocketing. The Yukon government recently assigned a project coordinator to assist in advancing the project through the assessment and regulatory stages, towards the ultimate goal of production.
A production decision is expected by the end of March 2007. YGC is looking at the potential of a 2,000 tonne per day open pit mine. We see little chance of the company not moving toward production and expect the mine to be operational by mid to late 2008.
Management is highly competent, led by President Graham Dickson, who has over 20 years of experience in the mining industry and has brought nearly 20 mines into production. YGC Director Don MacDonald also serves as Senior VP & CFO of NovaGold Resources Inc. and has over 20 years of experience in the mining industry. He has been directly involved in the operation or development of ten mines in North and South America with four different mining companies. This degree of experience is hard to come by in the mining industry, which makes YGC all the more attractive.
YGC may seem expensive at current prices ($1.59 CDN). It has already doubled since the beginning of 2006 and while the HUI corrected 18% in the last 3 weeks, YGC’s share price has increased by 18% in the same time period. But we are of the opinion that $1.59 will look cheap by the end of the year and be viewed as ridiculously inexpensive after the results of the pre-feasibility study.
At $1.59 per share with 56.5 million shares outstanding, the approximate market cap of YGC Resources is only $90 million. With 1.8 million ounces of gold and using industry norms, the company should be valued somewhere closer to $180 million. Many are predicting that the pre-feasibility study could increase the estimated resources to over 3 million ounces. So even using current reserve estimates, YGC’s share price could easily double from here. If the pre-fesability study comes back with a significant upside revision, YGC could provide one of the best returns of any miner during this bull market. Given the series of private placements that took place this year, YGC is also very well funded and has the cash necessary to move to production without any significant share dilution in the near future. With all of this upside potential and little risk, YGC is a no-brainer that should be a part of any gold investor’s portfolio.
Bob Moriarty writeup on YGC Resources
I'm going to start first by talking about the Ketza River Mine because it is the heart of the story. I call it a mine whereas YGC Resources calls it a project and kinda infers there are two different portions. All of their problem is communication and it was a mine so it is a mine.
Over the past 20 or so years, different companies have sunk over $50 million dollars into the Ketza River Mine located about 110 miles NE of Whitehorse. Between 1987 and 1990, Canamax produced over 100,000 ounces of gold averaging about 10 grams. Canamax put up a $25,000 bond and was given permission to mine an oxide layer of gold located between both an upper layer of sulfide ore and a lower layer of sulfide ore. I had never heard of oxide ore being found between layers of sulfide ores, normally an oxide ore is what was a sulfide ore body weathered down by water and air. But in this case, there was an underground river which ran through a sulfide body and turned it into an oxide. The good news is that oxide ore causes less problems with the environment and the bad news is that when you run out of oxide ore, the bond required to mine sulfide ore tends to be higher because of the increased costs of mining where acid may be an issue.
In this case, the Powers That Be demanded a $2 million dollar bond for Canamax to mine the gold sulfide ore. The company wasn't happy about having to put up that much money. The company shut down the mine and mill to show how much power they had (which is almost always a bad idea when dealing with any government agency.) Before they could win this test of wills, problems in other areas of the company caused financial issues and Canamax lost the property.
A fellow named Graham Dickson had built the 680 TPD plant. After the property bounced around the industry for a bit, he picked up a 100% interest in 1994. After sitting patiently for the price of gold to recover, Graham, now President and CEO of YGC, put the company into high gear in May of 2005. In all of the literature, the company refers to two properties, the Ketza River Mine or Ketza Manto Zone and the Shamrock Zone but to everyone other than a geologist, both properties will feed the Ketza River Mine. It's a mine, it is not a couple of exploration targets.
Because of 43-101, management can't say they are going back into production, only that they are going to make a production decision by March 31, of 2007. But the mine has already produced 100,000 ounces of gold from 10 gpt ore in the past, they have a 43-101 resource of over 1.8 million ounces in all categories. A new 43-101 resource is due out this month and it obviously will be higher. Over on Stockhouse, someone who at least sounds like he knows what he is talking about has looked at all the drill core results and has estimated the new resource will be in the 3.2 million ounce range. With those kind of numbers, you can guarantee the big boys will be soon sniffing around.
If I had upwards of two million ounces of gold and a mill and the gold was either near or at the surface and it ran 5-10 gpt, it wouldn't take me until next March to make a decision. It wouldn't take me past the time it takes you to read this sentence to make a production decision and regardless of what management puts in writing, I can assure you they are planning production.
I met Graham in Whitehorse in late August. Together with a major German shareholder, Werner Ulman, we flew out to the Ketza River Mine on a stunning Yukon autumn day. As we approached the property, I could see iron stained gossans off in the distance. That's a very good sign of a giant system.
Since gossans are such a good indication of iron rich systems, any interested reader should go to this link to read up on how valuable the information can be from a gossan. I wasn't aware of it before reading that piece but the largest open pit mine in North America, Bingham Canyon, was discovered because of the iron staining from a gossan. Since gold and silver are often associated with iron, a gossan is a good sign.
When I visit a property, I want to get some feel for the size potential. Many times, in fact, most times, that just isn't possible because the mineralization may only outcrop at surface. But we were seeing gossans a long ways away from the Ketza River Mine itself. This is one giant deposit and they aren't going to run out of gold any time soon. They pretty much could do drilling just based on visual indications.
A popular business model in mining is to maximize the mine. That is, produce all you can, as fast as you can and leave. I don't find that model as attractive as that of rationalizing a mine and creating a cash cow which will produce minerals at a profit for a long long time. Think of the gold and silver mines in Mexico and South America which have produced wealth for many generations. Many of the old family fortunes in the US and Canada came from generational mines.
Graham Dickson thinks long term. He is a production guy so he doesn't even think of a project without planning on how he can go into production. With the Ketza Mine, he can create the perfect size operation, to get a reasonable cost of operation but not put the mine out of production in five years by overproducing. I think that model makes heap of sense and those are the kinds of operations I want to see. Once your plant and equipment is paid for, your costs really drop down. I am baffled as to why mining companies don't work harder to make mines profitable. Isn't that the whole point?
Here are some of the goals and time lines.
New 43-101 based on the over $7 million drilling over the last year by September of 2006.
PRE-feasibility completed by December 31, 2006.
Production decision by March 31, 2007.
Mine and Mill in operation by late 2008.
Begin acquisition of another late stage property by 2007.
