new investors perspective, page-6

Thanks for you feedback Fmx_rider,

I do agree that some ore will be left in the ground where it doesn’t fit in the pit shell, but at these grades and depth, I expect not much at all will be left behind.
I expect the vast majority to be mined –maybe 500,000 out of the 565,000, maybe more.
I worked on 600,000 because of the likely upside through further exploration.
Very little will be lost through production with metallurgical results so far showing 99.5% recovery.
I disagree with the top cut being needed- as does ABU.
I can’t recall the company’s names but I can remember reading of companies exceeding head grades significantly because of having applied top cuts with nuggety gold.
As for converting inferred to indicated, yes I agree- I often see grades reduce on subsequent resource upgrades but usually only because more tonnes are added to the resource containing lower grade material which is still very much economic.
I.e. lower average grades but with significantly more tonnes and overall ounces.
I am very confident we will exceed 600,000oz of gold produced.
Patterson’s are tipping 1mill oz resource at Old Pirate.
I will not be working on that yet but would be very happy to see us double the ounces even if came at half the grade.
5g/t at this depth will still result in low cash costs and the extra 500,000oz will improve the overall economics considerably.
If we did come close to doubling the ounces at half the grade (maybe 50% higher cash cost), 1 mill oz at say $1000/oz margin gives us a cash margin of 1bill instead of the 730mill I estimated with 600,000oz at higher grade and lower cash cost.
That would roughly double the profit after all costs and taxes to around 600-700mill. Lets hope Patterson’s know what they are talking about.
For now I will stick to $300-350mill knowing we have upside through the next resource upgrade (not to mention Buccaneer and other prospects).
I expect a strong re-rate after this maiden resource for Old Pirate. A little patience should go a long way.
I expect to see this thing double again over the next 6 months and looking at the chart, it's due for one of those moves and it may begin at any time now.
This thing always has V shaped recoveries so it looks useless trying to pick a bottom. I am set now and will just sit and wait.