Hi overjumped Your research into NVO's experience needs to go a...

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Dazedandconfused

7,388 Posts.

2018

05/04/24

15:58

Post #: 73210352
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Originally posted by overjumped ↑

Bear in mind, Nullagine was not without issues - significant capital was sunk into the project (a good thing if CAI can make it work..) before placing this on C&M and searching for a buyer.

Initial mining at Beatons Creek commenced without establishing any reserves or undertaking any feasibility studies. Beatons Creek MRE was updated in 2022, within this outlining that "the Feasibility Study has been deferred due to current uncertain economic and regulatory conditions affecting the project", before transitioning into C&M.

Within this, they outlined a significant decrease in ounces from initial estimates (pic below), with the waterfall chart outlining why these ounces were lost.

Prior to this when production announced to be winding down in June 22,

Further in the news release, concerns are clarified to sit around requiring higher grades and lower mining costs (sounds familiar). There appeared to be additional concerns around 'coarse gold'.

Prior to this, it seemed like Novo was also plagued with processing issues at their Golden Eagle Mill - both technical and met related by the sounds of things?

In closing, here is what Novo shareholders think of parting with DR's new prized possession. Seems like shareholders will need to cross their fingers for both Warrawoona & Nullagine.

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Hi overjumped

Your research into NVO's experience needs to go a bit deeper.

In the prospectus NVO issued prior to their last CR they spell out pretty clearly why they abandoned Nullagine.
#1... the grades were 1.6g/t when they had internally modeled 2.4g/t
#2... they faced regulatory delays in a possible upgrade of the Golden Eagle mill to process refractory ore. NVO were churning through the available oxide and were not going to be able to continue processing without the mill upgrade.
#3... they had a suite of possible high grade tenements and made a business decision to pivot back to exploration.

It costs CAI about $125k/month to keep the GE mill on C&M... in the meantime it provides optionality. If you read the latest preso from CAI they are looking at perhaps mining some oxide ore from Nullagine and testing the economics of either trucking to WGP or running the GE mill 2 weeks on 2 weeks off. For CAI an extra 30k oz is cream... for NVO that would be a bust.

CAI was always going to introduce a float circuit (capex $30M??) to process an extra 30k oz/year. With the purchase (gift) of Nullagine that can be significantly more.

CAI is basically running a spoke and hub strategy.... what stranded assets might surround GE?

As far as NVO comments on HC... St Barbara sold its "flagship" to GMD and that appears to be a turnaround. If I spent a bit of time trawling through the SBM thread on HC I expect I could cherry pick a couple of inane comments about that deal too.

CAI Price at posting: 15.0¢ Sentiment: Buy Disclosure: Held
13 Upvote

8 Great analysis

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