Key Project Metrics and Transport
These slides need to be looked at collectively.
HIO - The big things for me:
The BFS is going to look at "direct-to-port slurry pipeline and dedicated deepwater port."
1200 - 1500 personnel for the construction phase and 400 - 500 for the operational phase.
If they build the slurry pipeline and the dedicated port, that could be between 700 and 1000 more people in the construction phase.
HIO is going to have a massive CAPEX.
We know that the cost of an employee in Australia is almost 10X the cost of a person in Madagascar.
It would be very easy to assume there is a much larger skilled workforce in Australia, and this would likely mean AKO will need to bring in experts and invest heavily in training people.
It also seems like the preference is for an "underground slurry pipeline" (surely more expensive than an above ground pipeline?) due to constraints on the rail network, and whilst this has the potential for a significant positive impact from an operational perspective, it would need to be funded and built prior to first ore production (and all of the dilution that will go along with that).
Whilst HIO is near infrastructure, it seems like they don't have a lot of access to it, and they will likely need to build everything they need to be self sufficient.
As per the 3rd slide in this group, it would greatly simplify the process and remove at least 3 steps in the freight process.
AKO - AKO "should" be able to self fund a lot of the primary mine development from the DSO operation.
As Madagascar is a developing country, I think it would be highly likely that AKO would need to bring in overseas workers to do a lot of the work. The good thing about this is unlike Australia, they could probably get overseas contractors to build the mine which "may" result in a lower capex than if they were to build the mine using Australian personnel exclusively.If we go to 10mt per annum (as per below), the company would likely need to build a slurry pipeline as it would not be feasible to truck the material, and it would probably cost too much to build a rail link to the port.
AKO would also need to build dedicated port facilities as it would be unlikely they could barge 10mt per annum at full production.
The thing working in AKO favour is that Bekisopa is about 800m above sea level, so the pipeline would be "mostly down hill". I don't know enough about slurry pipelines to have any sort of informed opinion.
Slurry Pipeline CostsI have no idea, but I found this article, and whilst it is not a "slurry pipeline", it is a pipeline and the article is from December 2020
https://www.pipeline-journal.net/news/western-australia-gets-go-ahead-construction-580-km-pipeline"Western Australia gets the go-ahead for the construction of a
580 km pipeline, costing $460 million, which will connect the Western Perth onshore gas production basin with mining customers in the Midwestern and goldfields regions of Western Australia."
AKO would need about 250kms, so maybe half the price? All speculation.
Mine Life
HIO - 400mt resource (currenly) @ 20mt per annum = 20 year mine life.
Obviously that has the potential to be expanded with more drilling and a resource increase, given they have quite large tenements.
AKO - Lets say after the 10 year DSO phase @ 2mt per annum the company has 450mt of ore (ore there abouts). Paul suggested the company could create a 10mt per annum operation. 450mt @ 10mt per annum = 45 year mine life.
We know there are other tenements around Bekisopa, so like HIO, there is potential for an increase.
Conclusion
AKO for the win.
HIO have a lot of work ahead of them, and they will need a lot of money and dilution to get this operation into production.
Clearly with a high IO price the project is compelling, but I think the entire build could come back well north of $2B.
Let's see what AKO's transport options look like and what it will cost to get the DSO starter going.
(20min delay)