The JORC resource is adjusted and reported for recoverable metal. The actual metallurgical recovery is used to reduce the resource grade from approximately 4.9g/t gold equivalent to the reported RECOVERABLE 4g/t gold equivalent.
Secondly the open pit will be well less than 200m deep. The Thalanga mine was underground and I think this will be too.
Red River and previous operators at Thalanga made good profits and have long established that this type of deposit, with almost identical geometry, polymetallic mineralisation and grade can yield good profit at much lower metal prices.
Remember Red River paid back a lot of debt and accumulated a decent cash pile from Thalanga before going under. They went under because of a court order to pay around $18-19 million of royalties that they had forgotten about and this took the cash pile and put them back into debt. An underground stope failure affecting their highest grade stope cut profitable ore only months after paying the royalties. Hillgrove also chewed a lot of their money and management attention.
In summary: 904,000oz gold equivalent recoverable metal. Open pit not going to 200m and the district has proven this ore to be economic even at previous lower metal prices.
Biggest question is where are they going to treat the ore or will they wait until enough tonnes to build a plant.
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