I'm not sure how accurate this will be but here goes.
A possible calculation that may give a very rough ball park figure for the profitability of the operation at todays spot prices would be by using the figures supplied in the E79 2022 PEA.
Strip ratio 5.8:1 calculates out to 6.8 tons to move to get one ton of mineralisation x $US 14.40/T (mining + process cost) = US $97.92 or A$146.88. My spreadsheet shows the value of ore per ton at todays spot price is A$146.50 So, today, the project is uneconomical. Then if you decide to add say 30% increase in costs for inflation etc, then the total cost rises from A$146.88 to A$191.
BUT, if you were to use a higher future PM price of $50Ag & $3,000Au the value of the ore increases to A$376/T which results in A$185/T free cash flow before tax, royalties, DA etc. If it's a 3MT operation, then that equates to A$555M.
Another option may be to guestimate the overburden only as a percentage of the resource size. Say its 1/3rd, then we arrive at A$118M to remove the overburden (41MT x US$1.90/T).
As I said, a guestimate at best.
SS1 Price at posting:
60.5¢ Sentiment: Hold Disclosure: Not Held
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