TMT Chart, page-1614

Hi dbd25

Thanks for putting up that slide, (I’m only occasionally coming by these days in the dearth of positive news/price action)
FWIW re that first point in your slide :

“Evaluation of tender submissions for major work packages”​

‘Be prepared for pain’ might be a good plan, as it seems it is a very tough market out there for prospective miners re costs, as per this story published in The West last Friday :

Spoiler : TOUGH TIMES - HIGH COSTS

Ramelius Resources boss warns cost pressures not ‘resolved’

Sean SmithThe West Australian
Fri, 27 January 2023 4:41PM
Sean Smith


The processing facility at Evolution's Edna May Operations. Credit: Evolution Mining Picture

Mark Zeptner reckons hope overtook reality when it comes to the seemingly resurgent cost pressures derailing some new resources projects and sending the budgets at others soaring.
The boss of gold miner Ramelius Resources believes that as COVID-19 restrictions eased, many mistakenly, but perhaps naturally, assumed the heat had come out of labour and supply chain costs.
“Maybe we were a bit presumptuous. Yes, it may be past the worst, but it’s by no means resolved,” Mr Zeptner says.

Quarterly reports from Ramelius and other WA miners are revealing that worryingly higher labour costs, in particular, remain a major concern across the industry and, in some cases, are outweighing the benefits of higher commodity prices and deterring go-aheads for new projects.

Liontown Resources isn’t backing down from its Kathleen Valley lithium project near Leinster, but the previously budgeted $545 million development will now cost an extra $350m to get into production in mid-2024.
On the other hand, Ramelius this week canned a proposed pit extension at its Edna May gold mine after the cost blew out from $165m to $220m, seriously undermining the economics of the project.

Company executives say the cost increases are almost across the board, with the exception of fuel, and being passed down to contractors from equipment and other suppliers and then through to miners.
“Suppliers are ringing up, saying ‘you’re prices are going up, we’ll give you a number on Monday, take it or leave it’,’” one said.

Not only are miners having to meet increases in construction labour rates of up to 30 per cent, they are being hit by falling productivity because of the skills shortages that have dogged resources rich-WA since the pandemic arrived nearly three years ago.

It means companies seeking skilled people to both build mines on time and run them are being forced to hire more staff to compensate for the experience shortages. Also job vacancies mean mining equipment is not fully utilised or operated efficiently, making it more difficult to recoup hire or purchase costs, further increasing operating expenses.

The Liontown and Ramelius blowouts, together with the costs warnings sounded by other quarterlies, will put a renewed investor focus on projects still in the pipeline, notably Wesfarmers’ $1.9 billion Mt Holland lithium project, where construction is well underway, and De Grey Mining’s $1b Mallina gold project.
The latter, where the budget was increased last year by more than $100m on the $895m cited in De Grey’s October 2021 scoping study, is due for board approval in mid-2023.

But the higher costs are also feeding into operating expenses, increasing production costs and lowering earnings at gold miners and others.

Metals and mining analyst George Ross at Perth stockbroker and corporate adviser Argonaut said the size of the cost increases being reported had caught many by surprise.
Noting the earnings impact on WA’s gold sector, Mr Ross said the problem had “been slowing building (but) hopefully we will reach a point where it will plateau”.

However, he also does not see immediate relief, tipping “sticky” cost growth, “at least in the medium term”, that broadly reflects this week’s December quarter data showing inflation at more than a 30-year high.
“There’s a shortage of labour coming from everywhere, it’s not just the actual builders of mines, it’s the builders of components,” Mr Ross aid.
“Take a walk down a street in downtown Perth, you will see coffee is up, food is up, everything is up.”

And may will be a long time (if ever?) before they come down again :/


Cheers