Ron labelled CAPEX increase as "significant" and we have seen a 90% increase in that bill, very much in line with my expectations of $125-150m. Likewise, "There are significant resources yet to be converted into Reserves and this will be a near term focus moving forward." The DFS reads conservatively which is pleasing given the turbulent environment we are in. If we interpret "significant" as even being a 25% increase on the resource front, this would mean a 10 year LOM, 2.125m Eq oz resource and a 757k oz reserve. When considered with my rough workings outlined in post #78431197, the base case I proposed with an increase of 508,458 ounces AuEq (2.2m total), looks well within reach.
Remember that the AuEq calculation is used with the multiplier provided by Ron. In the DFS this is "A gold price of $US2,500 per ounce, an antimony price of $US22,500 per tonne and total gravity/floatrecoveries of 83.1 % for gold and 86 % for antimony were used to calculate the Equivalency Factor(E) at 2.89"The PFS quoted a multiplier of 2.281. In post #78297738 I suggested (whether correctly or incorrectly) that a multilpier of 3.67 could be applied. Pleasingly, my $1.92bn AUD NSR revenue over the 7 years with recovery in mind (from the same post) was conservative compared to the mid point figure in the DFS which is $2.81bn. Extrapolating my number would have brought it to 1.92 * (8/7) = $2.19bn. This is in spite of my recoveries being somewhat off. My even rougher calculations in post #78297466 suggesting a $3.087bn LOM revenue without taking the conservative liberties is even closer. Remember again, this is in light of spot NSR currently being ~3.6bn.
With updated metrics, the calculation multiplier applied to the entire resource would read as follows.
Previous global resource is 1.7m AuEq oz at 7,4g/t
New global resource on updated metrics is 1.7m AuEq oz at 11.99g/t
11.99/7.4 = 62% uplift.
1.7million * 1.62 = 2.754 AuEq oz at 7.4 g/t in our resource at spot.
This is without the 508k oz I proposed above, and also without further aggressive drilling. Also bear in mind that my 508k oz suggestion was using a 3.7g/t gold average and not the 4.4g/t average in the current resource. This also ignores that higher grade mineralisation that exists at Bakers Creek which has the potential to skew this grade to the upside.
All in all, the above is not investment advice, but in my humble, and not expert opinion, the road to 3m Au Eq Oz is slowly becoming clearer.
Cheers PS
LRV Price at posting:
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