Can AU Develop Beatty Without Augusta Gold (TSX: G) Assets?

Is it possible for AngloGold Ashanti (AU) to develop the Beatty Gold District without Augusta Gold (TSX: G)'s assets?

What creates the most value for a mining company is having full-time employees who can work between multiple adjacent mining sites.

The Feasibility Study of Augusta Gold (TSX: G) for the Reward Gold Project shows a NPV at current gold prices of approximately US$200M (it's actually off the charts but we did the calculations) but that's using contractors to do the work, which makes the most economic sense if G develops the project itself. AU will be hiring full-time employees to work between all of their Beatty mine sites, which reduces labor costs and increases productivity. Under their ownership, the actual NPV of Reward at current gold prices would automatically increase to US$300-$400M and if they share infrastructure, it would be worth much more.

The North Bullfrog mine which AU is developing first only has enough ore to operate at full capacity for a few years. They obviously need Augusta Gold (TSX: G)'s Bullfrog ore for it to make any economic sense and because they haven't acquired G yet they are using the excuse of a "learning experience" to develop North Bullfrog so they understand how permitting/construction works in Nevada. We never heard a large gold miner say this before lol.

AU paid US$450M for Corvus Gold and ended up with 1m oz of gold reserves at North Bullfrog.

AU paid US$150M for Sterling and ended up with 850,000 oz of inferred gold resources at that project.

Augusta Gold (TSX: G) has total resources of 1.92M oz directly adjacent to North Bullfrog and Sterling including 370,000 oz proven & probable reserves. Augusta Gold (TSX: G) closed last week with a market cap of US$67M.

The only warning we will have before the buyout is what the company has already said. If you're waiting for some mainstream media person to hold your hand and tell you it is about to happen you are going to just watch it happen.

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