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Great Western Mining share price recovery rests on refinery completion

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Great Western Mining Corporation [AIM:GWMO], the AIM-listed mining and metal refinery company operating in Nevada hasn’t quite got there, but is slowly creeping towards revenue-generation.

As previously reported, Great Western doesn’t just want to be in the business of dirt-digging, but wants to be at the value-add end of the precious metals sector, and is in the process of building a refinery to process the gold, silver and copper that it extracts from its own tailings and historic mine works, as well as the ore from other artisanal miners in the Nevada flats.

To which, as reported, the Dublin-headquartered mining company went into partnership with local haulage contractor, Tipton Trucking, to form Western Milling LLC last year.

Refinery completion delays

Since then, Great Western has had several logistical, regulatory and weather-related issues to deal with, which have frustrated its ambitions to ‘get to gold’ quickly. However, today (14th November) Great Western reported that the refinery is almost ready to go.

Having found the right type of concrete, getting it trucked to a remote location, keeping in-budget and dodging Biblical downpours (which washed-out the nearby Burning Man festival, turning it into more of a Drowned Man festival), the majority of the infrastructure has been laid down.

Brian Hall, Great Western’s chairman said: “All the directors of Great Western are shareholders in the company and we share the frustration expressed recently by a number of independent shareholders over the delays that have arisen in completing this project.  However, it should be noted that the basic design has not changed since inception and the concept remains sound with costs under control.  It should also be noted that, despite delays, the project is likely to be achieved at a fraction of the cost of a green field site using new plant and equipment, which was an earlier option considered by the company.”

Most of the core machinery is being installed currently, though the team is waiting on parts for its Jaw Crusher and the Rod Mill – a 20 tonne machine – is making its way down the backroads and byways of Nevada to arrive for the final stage of pre-start-up. Wells have been drilled that will provide an excess of water, and a generator is being set up.


Nevada environmental permits delayed

Great Western said that operationally the plant will be ready to go before the end of the year, but the JV is still awaiting environmental permitting from the Nevada Department of Environmental Protection. Great Western was initially informed by the regulator that this process, which started at the beginning of the year, would take six months to complete. However, the regulator at the end of the six-month timeframe contacted the JV to say that it was short-staffed and the folks that were already there were overworked, so the process would take at least another two-to-three months.

The extension came and went, but the regulator still hasn’t produced the paperwork. Great Western scheduled a meeting with the Nevada Department of Environmental Protection and were told that the hold-up wasn’t due to there being any significant issues with the refinery, but down to administrative over-stretch and the JV would just have to sit and wait it out.

Other bits of paperwork, including the licence from the Federal Bureau of Land Management permitting the moving of wastes and material are still outstanding, again due to administrative backlogs.

Hall made the point that although the refinery was an exciting side-hustle, that would allow Great Western to start producing revenues much quicker than similar exploration miners, the real value of the company was the metals on and in the ground at its mine sites. Hall said: “While generation of first revenues will be an exciting development for the company which will support operations, I want to point out that the main driver for Great Western’s growth is not the process mill but the enormous upside potential of our large inventory of claims in the Walker Lane Belt of Nevada, which we are working on fruitfully and moving to the next stage.”

Great Western Mining still in loss making territory

That part of the business is progressing at a more traditional (slow) pace. The company’s last financial update in September, to the end-June saw the company still in loss-making territory, reporting a loss of EUR527,985 (GBP460,528) for the period, up 14.7% year-on-year, but down 33% on December 2022.

The company was also burning cash, with EUR410,661 in the bank, compared to EUR1.2m in June 2022 and the company plugged the gap with a placement of EUR913,242 of shares before expenses. Operationally Great Western’s drilling programme on its OMCO Mine, a gold prospect, proved the vein was extended and open for exploitation.

The company has six claim groups, all quite close together in geographic terms. Its flagship is Olympic Gold, 16,400 acres in south-west Mineral County, lying within the Walker Lane Fault Belt, a major metallogenic belt host to all the ‘medals metal’ deposits of gold, silver and copper. The company has conducted test drilling on the tenement, with a focus on the OMCO, an historic mineworks and Trafalgar Hill. This project has significant tailings deposits extant.

The miner has also made significant progress on mapping its copper deposits this year. The company placed another EUR581,139 of new shares post-period.

Great Western has been on AIM since August 2011 and opened trading today at 0.0402p, and is down 70% year-to-date, and over one-year down -65.8% with its shares have ranging between 0.04p and 0.15p over a 52-week period giving the company a market capitalisation of GBP2.5m.

A lot is riding on getting the permits through to start operations. Should they come, shareholders should expect some movement in the right direction in the coming months.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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