Great Western Minerals Q3 Results and Project Updates generates positive market reaction
Good reaction to Great Western Minerals Group Ltd. (GWMG) Q3 webcast hosted by Marc LeVier President and CEO and Thomas G. Mair Vice President of Finance and CFO last week — TSXV: GWG up +17.86% and OTCQX: GWMGF up +10.29% for the week at market close on Friday, November 15, 2013.
The cash position for GWMG as of the end of September 2013 was C$28.3M and they project C$23M by year end. With a market cap of $33.5M, GWMG at the current burn rate has an estimated 12 months of cash at the beginning of 2014, and will be working to secure project funding for GWMG’s Steenkampskraal (SSK) monazite mine located in South Africa through improved project cost/benefit visibility.
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Marc Levier commented on GWMG advantages which included a dedicated team capable of executing their strategy of developing their feasibility study – planned for late Q1 2014 completion, a mission that will need to be achieved for project financing.
The market, which is undoubtedly concerned about any company’s ability presently to get project financing has undoubtedly impacted the stock’s recent activity as additional working capital will be needed before SSK may be brought to production. GWMG holds 100% equity ownership in Rare Earth Extraction Co. Limited, which controls SSK.
At a presentation in New York City in July, Thomas Mair, the CFO indicated Net Present Value of SSK as C$555M with an 11 year mine life and a 2.5 year payback. The company has more recently indicated that additional cost and time savings through tolling are being studied.
At this stage, the manufacturing business is profitable even though the prices of the commodities fell 30% during the 3rd quarter. They managed this by producing more (as a percentage of total production) of higher margin product. They are also ramping up greater manufacturing capacity, which should generate more revenue and profitability in this division going forward. Their recent performance improvement in the materials sector on production cost basis has been encouraging and this along with showing some cost control improvements on SSK is positive overall for GWMG.
Here is the GWMG PPT used in the webcast for your review:
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