nectar - I am not one of those who said there was no drilling happening, but I do want to point out a couple of mistakes in your analysis.
Your statement 'By continually drilling and increasing their resource to from the current 500 million tonnes to 650 million tonnes!
This will allow them to increase their annual production volume of the highly profitable hematite from the current 35 million tonnes per year to 50 million tonnes per year!
is, surprise surprise, misleading - or maybe you are just misinformed.
Annual production is based on Reserves not Resources. To make a case for a 50mtpa operation for at least 10 years will require a doubling of existing Reserves of 250mt to 500mt.
This is way beyond the current requirement of simply having a Reserve that meets the current base case 10 year 35mtpa operation.
I believe that one of the reasons the JV arrangements have been delayed is bacause nobody wants to tip money in to a project where the Reserve is insufficient to support the base case operation.
Get past that hurdle and then you can start dreaming about a 50mtpa operation.
SDL Price at posting:
52.5¢ Sentiment: None Disclosure: Not Held
