SP movement, page-66

None of you, and I mean none of you, have any idea as to what it takes to make a success of a narrow vein mine located in the Victorian high country. The Morning Star mine is a jewel and the riches lie at depth - below the lowest workings. There are small pickings in the upper levels and they will at best pay wages but NEVER a dividend. It will only ever be an airleg operation as the shoots are narrow and the ore needs to be hand picked. In the upper levels the ore bodies are fairly flat laying and mining is expensive - scraping, hydraulic extraction etc = double and triple handling. Up the road the A1 has the ability to mine breccia or stockwork zones but they have yet to be proven to be able to pay their way. It is a dissimilar ore body.
Morning Star is ideally suited to a small syndicate of realistic investors who understand the risks and rewards of this type of operation. There is infrastructure in place to access the promising structures identified by GMA (Western Mining Corporation) below the base of the underlay shaft. Extensive pumping and shaft refurbishment is required together with an additional winder, services, ground support etc to get there. To consider a decline 1:6 to 700 metres below surface at a cost of $21m plus when shaft access can be made available is ludicrous. The Gecko mill is basically a modular design and is of questionable quality. The mine originally prospered by way of a 20 head stamp battery for the free milling gold component and a small cyanide plant to treat the sulphides. The current mill recoveries will not match those of the old crusher given it's inability to treat the cons.
There are environmental issues to confront - tailings disposal (underground voids are limited), water treatment, processing of the refractory component etc .
Be realistic. Over the life of the mine the average annual production was only around 8,500 ounces. Do you honestly believe that they can sustain an annual production of the magnitude to sustain a company the size of Austar?