Q: so are you saying that they had to use a high cut off in order to report a good flake distribution? A: Cut off grade and Flake distribution in a reserve are independent of one another, there is no correlation whatsoever.
Q:If so does this mean all the stuff below the cut off ore grade is small low quality junk as some on here like to refer to smaller stuff, or that for some reason you can't process it without turning it into low quality junk. A: No, WKT's flake distribution is consistent even in the sub 10%TGC. A: Based on the research article I previously posted, Excess processing is more likely to result in large/jumbo flake destruction and thus the distribution of smaller flake graphite would increase. In saying that, there would still be large - Super Jumbo graphite being produced, just the distribution would likely change, and hence lower the weighted average basket price. The less you grind, the more you retain. This would likely be a contributing factor for setting the high cut off grade.
Q:If so can you advise if this is a problem that is unique to Wkt for some reason, like is it cheap processing equipment, poor crushers, or some other fault in the process flowsheet that means they are having difficulty with lower grade ore? A:The degradation of Large/jumbo flakes due to over processing is not unique to WKT it applies to any/all graphite producers focusing on maintaining flake size. The reason WKT focusses on the large/jumbo flake market is due to the substantially higher basket price. The "cheap processing equipment" does not mean it is poor or has faults, it just means the plant can be a lot smaller as you have a higher grade being fed into it.
The theoretical size and cost of the plant itself is directly attributable to: 1. Desired output (Tonnage & Quality) 2. Quality/ TGC% of ore fed in
Q:Or is a universal mining law that applies to everyone, though I dont think there is actually any correlation between cut-off grade for your reserves calculation and what your flake distribution is. A: Cut off grade and Flake distribution in a graphite reserve are independent of one another, there is no correlation whatsoever.
Q:Once you explain to me that it's a universal law can you then explain to me why it doesn't apply to say for example MNS (just one example which I no longer hold so not trying to promote it) who have a cut off grade of 3% TGC yet have very impressive flake distribution with approx 41% in the Jumbo/super jumbo categories , all from a 4.8% TGC ore grade. Here's a link to the MNS BFS for substantiation purposes A:Thanks for the link, my statement and the research regarding flake size preservation also applies to MNS. Given their low TGC, it is less likely that their flake size/ distribution as found in their reserve will be retained, hence their own comment in their BFS: "In-situ grade is just one of the relevant factors in graphite project analysis . Graphite project economics predominantly driven by realised basket price― Final concentrate purity and flake size distribution are therefore critical and need close evaluation".
Q:Your mining plan is what will then determine how that economical reserve is mined and what size plant etc you need, not the cut off grade. So if that stuff below the cut off grade was in fact economical it would have been included in the reserve (via a lower cut off figure) and then your mining plan would have indicated that you would initially target the higher grade ore for x number of years before processing the lower grade.So the fact that it's been excluded from your reserves via a high cut off tells you that in fact it is currently considered uneconomical to mine and process and for some reason your project requires a high ore grade to be profitable. So not good to require a high cut off grade. A:Good point, the only constraint at this point of time is the size of the market. The 10%TGC cut off grade optimised the NPV of the mine @ 40ktpa production level. Anything WKT mines in the future sub 10% is still economical, it just wouldn't be optimised for today's market. It just means that all the additional processing of low grade material which has 2 main effects: 1. Costs more to process and hence lowers the margin per ton mined. and, 2. Additional processing is more likely result in the destruction of large/jumbo flakes. There are Mining Engineers and Accounting experts who work through the optimisation process to deliver the highest margin on the project (Which is partially the reason why the plant has such a low CAPEX.) Relatively speaking the plant it is being fed a small amount of good quality ore.
S:Anyway, for someone who claims to be so knowledgeable I find it hard to see how you don't understand such basic mining concepts and I sincerely hope the novices on here aren't being fooled by the repetition of such nonsense. R:Everything you say is in your humble opinion. I always address your posts and respond with facts recommending further research on your part. I provide links to research, I am happy for someone to challenge what I write on the basis they have also done their research. Every time someone like you comes here and questions the viability of the project, you provide me with the opportunity to provide FACTS and not opinions.
Regards,
Natos
WKT Price at posting:
29.0¢ Sentiment: Buy Disclosure: Held
(20min delay)