IPO Watch: Why Twinning is Winning
“Gold is money. Everything else is credit.” – J.P. Morgan
Despite the contemporary connotations of describing something as a “goldmine”, the process of setting up and developing a goldmine can be extremely costly, time consuming and frustrating for all involved. Historically fraught with danger because of working conditions, the gold rush deservedly earnt its reputation as the new Wild West.
Modern gold mining remains risky, although for different reasons. For the companies involved, the purchase of land and equipment is often a gamble. For investors, providing capital to these companies can feel like a leap into the unknown. Sometimes, however, a company finds itself with a whip hand. Or in other words, sitting on a goldmine.
PVW Resources’ purchase of Mt. Clifford may have seemed, to the outside observer, a puzzling investment. On the surface, the site at Mt. Clifford had previously been owned by small-scale underground miners, who had invested considerable time, money and energy into extracting as much gold from the rich seam as they could.
But the previous owners’ rationale for selling wasn’t that they felt the resource to be exhausted, in fact quite the contrary; they recognised there was a vast, untapped resource that required a greater level of expertise, capital and equipment than they were able to provide. To that end, it’s worth noting that the original family owners remain invested in the new project under PVW Resources.
While the family didn’t necessarily have the wherewithal to extract the utmost from the site, their efforts have provided PVW with an extremely useful base upon which to build. A number of holes were drilled in the 1980s by these original owners, to verify their suspicions about the amount of gold that their land lay above. Unfortunately, or fortunately, depending how you view it, quality assurance standards have advanced significantly in the last 30 years, and the data from these original holes needs to be reverified to meet modern quality controls.
What PVW Resources are able to do as a result of this original drilling however, is to use a process called “twinning”. This involves drilling guide holes next to the existing ones, and matching up the data to see if it offers the same conclusions. The major benefit of this process is the reduction in the number of holes you need to drill; if you have 50 original holes, you only need to twin five of them, or 10% to verify the data.
Naturally, the process of twinning saves both time and money, and means the project can advance more rapidly.
With the company currently offering an IPO, they expect an ASX listing to be completed in Q4 2018 with capital raised from the IPO set to be the final piece of the puzzle enabling PVW to commence drilling.
The upshot of these beneficial circumstances is that PVW’s project at Mt Clifford is far more advanced than the usual IPO in this field, and is ready to fast-track to cash flow. If you are interested in finding out more about PVW Resources and their IPO, you can request the Prospectus here.
*Reachmarkets Australia Pty Ltd trading as Reach Markets are the advisors assisting PVW Resources with the management of an Initial Public Offer (IPO) and may receive fees depending on whether the offer is taken up by investors.
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