WITH the Greek tragedy last week playing to packed houses at the home of the Cannes film festival, and likely to go on tour for the rest of the year, this is probably a good time to sit back and watch.
The Punter this week has done nothing of the sort. Silly boy.
Instead of husbanding his dwindling cash, he has spent money on a would-be gold miner.
Millennium Minerals (ASX code MOY) has been exploring an extensive patch in Western Australia’s east Kimberleys since 2001.
A feasibility study in 2007 showed that the project was not commercial.
But with a significantly higher gold price, and more drilling extending the resource, the company later decided to go ahead.
It now expects to be producing gold by the end of next year.
Mine development and the construction of a gold processing plant are well under way. A one-for-one rights issue in September, with the bonus of a free option with every new share, did relatively well, with shareholders taking up 80 per cent of the issue and the underwriters coughing up for the rest.
The company now has about $40 million in cash, and another $45m in agreed financing, which should be more than enough to cover the estimated $63m cost of the mine development and the processing plant.
In the unlikely event that the politicians finally sort out the world’s finances in the next 12 months, the gold price is likely to fall and Millennium could be in the poo.
But the Punter is a pessimist, and doesn’t think that is very likely.
He has spent $1020 on 250,000 Millennium options (MOYOB), expiring on January 5, 2013.
If the gold price holds up, and the company pours its first gold on schedule, the shares should get a bit of a lift.
The options give him the right to buy the shares for three cents each. Last time he looked they were 1.7c, but they had been as high as 2.5c in September.
Recent drilling has been encouraging, with a best result of five metres at 12 grams a tonne from one hole and 11m of 2.86g/t from another.
As a result the resource estimate of 586,000 ounces is expected to be increased before the end of the year.
The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.
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