Gaz, iIt's not in production yet.....and struggling to progress. So Gaz how many have you seen that go into production without a proper feasibility? I'll justify my point below:
All we have is a 20 year old project that never went ahead. It was ceased late 2002 due to the delay or inability to access the gas pipeline at the pre-feasibility stage.
https://**promotion blocked**/Article/1782145/Mt-Grace-switches-Mg-project-to-Malaysia.htmlThe NT government put it on hold in November 2002.
https://ntepa.nt.gov.au/environmental-assessments/incomplete-assessmentsPrior to this the first stage pre-feasibility was completed mid 2001, and the "Definitive Feasibility" which is a final one after a second stage was planned to be completed by end of May 2002.
The March 2002 EIS report shows this in Section 2.6 page 24 of the pdf:
https://ntepa.nt.gov.au/__data/assets/pdf_file/0006/289140/batchelormagnesiumproject20EIS.pdfThe bit on Golders below gives some points on page 17 of the pdf and states that Mt Grace are still working on the Definitive Feasibility Study (same as bankable feasibility):
I dunno what Golders did exactly as referred to in their 2001 reports (see ref page 127 of pdf) but I can tell you that Golders would have recommended an "ore reserve" is essential to complete the definitive feasibility and to get finance. To do it would have needed further metallurgical sampling and drilling other than in the trial pit.
By this time March 2002, Mt Grace had 2 main issues. Gas availability, and drilling the resource for upgrade to an "ore reserve", and maybe why the "ore reserve" and definitive feasibility were not completed due to cost when the gas was not available.
Korabs 2005 prospectus shows this to be correct, and states the obvious that work was done at feasibility level, ie "advanced to the feasibility stage" but it was not completed:
The prospectus shows the planned drilling including metallurgical work and scoping studies (that are a lower level than pre-feasibility) :
Korabs announcement on on 13th January 2015 shows this drilling was not completed nor the metallurgy.https://www.asx.com.au/asxpdf/20150113/pdf/42vzb83y4ht3vq.pdf
This announcement simply shows the company has updated the 2001/02 pre-feasibility with 2015 cost estimates but no other work has been done. It was done internally, but by who ?? Its okay to run the numbers for a look, but it needs qualified people with experience such as mining engineers.
The graph below is typical from consultants and shows the estimated accuracy at each level (similar to the JORC code) where each level of further work increases confidence.
https://amcconsultants.com/experience/feasibility-studies-for-mining-projects/ (worth reading this as it explains the levels of feasibility used by industry and why)
The original pre-feasibility in 2002 was correctly showing accuracy of +/-30%, and also by the company in the 2015 announcement above.
Yet in 2018 the company mentions "
this is now a feasibility study" in various announcements. But still has the old level of accuracy, and hence low confidence.
If the company used qualified consultants they would be recommending to have a higher level of confidence, and this would make conversion to an "Ore reserve" easy.
I don't see how all requirements of feasibility have been met or to justify the detail in announcements. If they were, why is the accuracy and confidence level remain so low ?? Did the company run it themselves.
A resource geologist has made it clear to me that there are a number of exceptions etc in the requirements, and even if the company is compliant, it is at the very lowest level. She made a good point that industry standard is to get to the highest level of confidence as it safeguards shareholders. Each step of the way justifies sepnding more on the next level.
Upgrading the 1999 resource to a 2019 reserve, having a higher accuracy and announcing a definitive/bankable feasibility will attract investors/finance and partners to the project.
If the original pre-feasibility is so good it would be easy to do this unless management has sat on it and not done the job properly by trying to do it themselves. So again no detail of qualified consultants or staff who have done this work, or the current ones working on the NOI have been released. A reasonable person would ask why?
Going ahead at the lowest level of confidence will not attract support, and maybe why the NOI has issues?
Here is a good e.g. of a proper announcement, and this is what's needed to get investors and partners into the project:
https://www.asx.com.au/asxpdf/20180918/pdf/43yfbg1smg3hpd.pdf
(20min delay)