Value Microcaps Junior Miners

[checkmate28]

GWA.V Gowest Gold, Time for an update as they've taken another nice step at derisking the project.

Were talking about a $6million dollar MC company that has some risk attached, so this isn't for everybody. You probably shouldn't buy this in todays market unless you understand the risk and what they are doing. They are not producing anything and are short on cash. Disclosure out of the way.
Pertaining to yesterdays News Release
Gowest Memorandum of Understanding (MOU) with United Commodities AG
http://web.tmxmoney.com/article.php?newsid=65178111&qm_symbol=GWA

Gowest Gold is a $6 million MC company that probably has the best qualiry, largest gold resource without a mine in the Timmins ON area. They are moving a 1.5 million oz project towards production in todays market. Their 1.5 million oz NI43101 resource comes from one target and there are 17 other targets, some partially delineated, some located from fly over magnetic testing. I'll carry on with my post from Stockhouse.

Gowest mgt again, in the worst market for financing in decades, showed resourcefulness by finding another share holder friendly path to production with lower Capital expenditures while keeping dilution to a minimum.
If these agreements gel, operationally Gowest has their solution. Gowest would process the 90gpt concentrate at the Xstrata Kidd mine and send it down the road about 200 kilometers to the Cobalt refinery. At that point the shipping volume is greatly reduced by the 90gpt concentrate.

My math: 95,000 oz/yr production =8000 oz/mth or 248,000 grams.
at 90 gpt concentrate, they would have to move 2755 tons of concentrate/mth. the 200km.
At $1250 Au, 8000 oz Au, represents $10 million in gold. Trucking or rail costs ? my guess is $40/ton or less = $13/oz gold. Any body out there can help on this cost, let us know.

United Commodities is a perfect fit. Based out of Zurich Switzerland, they are specifically equipped and licensed to handle Gowests refractory ore. They would build a refinery at their own cost for Gowest and give them the option to partner in the refinery. Gowest has already purchased the Con mine autoclave and some other equip. The Autoclave is probably the most expensive piece by far. It was working fine when the Con mine closed. They could use that as a large contribution to their buyin of the refinery and save about 2 years of build time. UG would also benefit by using their patented CRT Clean refining technology to pull the remaining metals from the tailings for profit. This technology is embraced by local governments as it cleans up pollution so this should help the permitting process that UC is responsible for.

So what Gowest is missing is still the CAPEX dollars to finance the production solution. Current PEA calls for $60 million Capex for the contract solution and that includes the engineering work their doing now and the underground. The PEA shows net cash flow of $28 million before tax with an IRR of %50 at $1200 gold. They wont need the whole $60 million to start producing as they will start with a ramp that can access the shallow high grade ore. They are working now towards the full Feasibility Study that should be out soon and a key for any financing agreements. The bulk sample to UC will be a key determiner for future progress.

Possible solutions for CAPEX money other than straight equity financing:

From reading the PEA I know the Gowest tailings are worth a lot of money in millions because of the left over metals and the high amount of sulfur. This surfer is also of great benefit, as fuel to run the autoclave. The sulfur would help UT as well. Under the MOU, Gowest would get paid cash for a portion of the tailing profits, and for the refining of their ore. Possibly They could get an upfront loan for the rights to the tailings proceeds? I have some DD on UT for the next post on SH.

Also under the terms of the MOU, UT has the option to invest in Gowest mining operations. UT could invest CASH for equity at fair rates to shareholders?

Xstrata was a $77 billion dollar global company before Glencore bought them. Glencore is even larger. UT is a publicly traded global company out of Switzerland with a $91 million MC. Gowest has done well here, surrounding itself with good companys. These company's, no doubt have done DD on Gowest before signing agreements. Xstrata hired a separate engineering company to do additional DD. Surly, they see a marketable resource on the Frankfield property or they would not have signed agreements with Gowest. Gowest is a $6million MC company. One only needs to connect the dots and fill in a couple blanks to see where this can go and realize the risk reward ratio is very good here. None of these other companies is going to put this all together, Gowest still has to raise the cash somewhere, and at the same time, keep all the pieces together.

Checkmate28

Read more at http://www.stockhouse.com/companies/bullboard/v.gwa/gowest-gold-ltd#0rUqiLdyMpzMglkp.99