Bob Moriarty of 321 Gold dissects Millennium Minerals’ latest moves in Australia.
I wrote a piece about Novo Resources recently and mentioned Millennium Minerals Ltd. (MOY-ASX), an Australian company that has a mill nearby to Beaton Creek. I made a comment in the piece that Millennium was running out of ore and it might make sense for them to do some kind of deal with Novo; either toll milling or a purchase of Beaton’s Creek.
One of their shareholders wrote me a rather snotty email informing me that Millennium was doing just great and adding high-grade ounces like crazy. Well, actually their share price has been doing just great but they do have a giant problem with future feed. Their latest press release about drilling and news reserves concealed a lot more than it revealed.
I went back and looked at a report that came out just over a year ago. The company was on the verge of collapse. Their shares had been as low as $0.023 in August of 2015 before climbing to $0.034 at the time of the report. This was a company with a mill that cost about $100 million to build four years ago claiming over a 1 million ounce resource and only a market cap of $26 million Aussie.
The company did well, climbing to a high of $0.415 on the back of the increased price in gold and more interest in Australian gold producers. After a major management change in 2015, someone obviously put the word out that they needed to find more gold if they wanted to keep their jobs. They now have a market cap of $230 million Aussie.
They did find gold but at a cost of all of their free cash and I suspect more. They had said they were going …read more