GOA 0.00% 0.2¢ gold anomaly limited

why goa is a goer

  1. 2,755 Posts.
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    I sold out of GOA a little while back at 4.5c (bought at 3.5c), partly due to wanting to consolidate the number of stocks I held. I had also not put the research time into GOA as I had some other stocks.

    I honestly did not believe we would see this close to 3c again and after a second more thorough look decided it was worth sinking some $ into and took a position at 3.4c. I feel there is quite solid support at the low 3s should it pullback, but am not really expecting it to from here as I expect we are close to the bottom of this correction in Gold (I dont think well see lower than $1070, suspect we may have already seen the low).

    The main benefit here is the multiple projects that GOA own completely or in part, several of which could be worth WELL OVER the entire current GOA market cap ON THEIR OWN should they make it to production without incident.

    Here are some recent notes collated before I purchased last week, not really much more than a cut and past from different announcements, but should be useful enough to those new to the company or those wanting a refresh.

    Recent major developments:

    * Completion of merger with Anomaly (3 Nov 09):
    Importantly, the acquisition means that the company will also get the expertise of Peter Macnab who is an expert in PNG based exploration being co-discoverer of Lihir and discoverer of other world class projects Wafi, Frieda River, Misima and Simberi.
    * Key step taken in commencing gold production at Sao Chico project in Brazil with processing plant order (12 Nov 09):
    The plant will be constructed at Gekkos Head Office base in Ballarat, Victoria.
    Completion of delivery to site at Sao Chico is expected by February 2010, with
    commencement of gold production in March 2010.
    * Entering into an agreement revising the original arrangement with BacTech and Yamana such that GOA will now be acquiring 100% of the Wapolu/Gameta projects (16 Nov 09).
    * Completing preparations for the earthworks program scheduled to begin on
    January 11th (2010) at Crater Mountain (drilling to follow)

    A brief over view of their main projects (there are others that I havent covered here):

    Sao Chico (Tapajos region of Para State in northern Brazil)
    * GOA owned 100% (will pay 40% Net Profit royalty)
    * 5 high grade gold veins 1km strike length with avg width 1.0m and depth 200m. Two new veins recently discovered
    * Targeting 20,000ozs per annum at US$200/oz cash cost & less than US$340/oz after NPIR payment
    * Capital expenditure to commence production is expected to be less than US$450k
    * Grab samples of the vein material include up to 283 g/t gold, 304 g/t silver, 52.8% lead, 15.9% zinc and 1.81% copper. A channel sample of 1.0m at 347 g/t gold was found.

    Crater Mountain (New Guinea Orogenic Belt. PNG)
    * Crater Mountain is a significant asset, which is under explored. It has had high quality exploration undertaken by BHP, Esso and CRA and was regarded as a tier-1 (high potential) asset. Rather than lack of prospectivity, it was other broader corporate strategic issues that have led to these premier multinational companies not completing their exploration programs.
    * 70% interest after $900k spend. Advanced exploration asset. Potential for MULTI MILLION oz deposit.
    * Targeting production of 25,000 oz pa plus @ 5g/t at a cash cost sub US200/oz
    * Minimal (US$520k) capital cost for roads, benching & trial plant prior to commencement of production
    * More significant drill intersections are as follows;
    121 metres at 1.77 g/t Au
    151 metres at 1.38 g/t Au, including 24 metres at 6.55 g/t Au
    178 metres at 1.30 g/t Au, including 32 metres at 2.76 g/t Au
    129 metres at 0.61 g/t Au, including 25 metres at 1.60 g/t Au
    205 metres at 0.86 g/t Au, including 25.5metres at 2.36 g/t Au

    Croydon (North of Croyden in NW Qld)
    * New poly-metallic mineralised system discovered under cover sediment. Drilling polymetallic targets with two rigs.
    * Drilling Highlights include significant Zinc, Silver, Tin and Copper intersects:
    Hole A2-008, Anomaly A2 are as follows: 4.0m (359.0m to 363.0m) at 3.09% zinc, 416.6 g/t silver, 0.42% copper, 0.63% lead and 0.63% tin. (Including 1.0m (362.0 to 363.0m) at 8.18% zinc, 1060 g/t silver, 0.98% copper, 1.25% lead and 1.31% tin)
    * Seeking JV partner

    Gameta & Wapolu (Fergusson Island. PNG)
    * GOA now own 100% following Nov 2009 announcement
    * 2004 BFS showed economically viable with cash costs at US$400
    * Targeting 1m oz Gold & 32k-55k oz/pa production

    As always DYOR, but I feel that GOA is hugely undervalued at $30m market cap. Sao Chico alone should be worth over $30m if production targets can be met.

    I like the idea of small scale Gold production funding the exploration and development of their potentially much larger project at Crater Mountain. It not only reduces the capital burden on existing shareholders (e.g. we should see a lot less capital raising), but the smaller project should give us an idea as to how well current management can bring a project online and start producing Gold!
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