GCX was formed by the merger of Michelago (MIC.ASX) and Golden China of Canada. There are 50m ordinary shares and 9.5m warrants on issue. Undiluted market cap at AUD $0.75 = $37m. Liabilities of CAD $23m are partly offset by Australian Solomons Gold (SGA.V) shares worth CAD $17.4m (at SP of CAD $1.32)
Also interesting to note is that the Australian-listed ADR's are trading at a discount of approximately 18% to the Canadian listed shares (AUD 75c while the shares are selling for AUD 89c in Canada (@ CAD 81c/share))
The closest project to production is the Bayinhar project in China. It is planned to produce 100 KOz Au/yr by 2009 from the resource of 605 KOz @ 0.77g/t Au. Low cost heap-leaching will be used to extract gold from the oxide part of the resource (most of the resource so far defined is oxide material). Drilling is ongoing and is discovering sulphide mineralisation at depth, below the existing resource. The company is hoping for 1MOz in total. A full feasibility is scheduled for completion in Dec 2007. The pre-feas. estimated a cash cost of USD $280/Oz Au. Capital cost is USD $29M (quite low compared to the cost of a mill and cyanidation plant).
A back of the envelope calculation gives (680 – 280) * 100,000 = USD $ 40M/Yr. = AUD $48.2M = AUD $0.80/share**
This is not the same as EPS because no account has been taken of taxation etc.
Bacox Gold Plant (China)
GCX has an exclusive 10 year license to utilise patented Bacox (bacterial oxidation) technology for extracting gold from refractory sulphide ores and concentrates. The plant (currently operating) was acquired from MIC. Currently they produce gold from bought-in third party gold concentrates, producing an EBITDA of CAD $3.5m/Yr. Presumably this plant could be used to extract gold from the primary sulphide ore (or a flotation concentrate thereof) found at Bayinhar below the oxide resource.
** Using AUD/USD = 0.83c, gold price = USD $680, fully diluted no. shares = 60M