Ann: Production Update and FY 2019 Guidance, page-105

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nordesmic

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01/04/19

17:02

Post #: 37954261
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Originally posted by eshmun ↑

Hi Elctra,

Thanks for your post.

Where did you get the average orebody width numbers for Beresford and Allason?

And also, do your ozpervm calculations rely on a strike length esitmation, because if they do be careful with the blue and green stope figure as its not a true long section and the scale probably has an element of distorted perspective depending on the 3D model view direction. You are better scaling off the second figure you used (black background) if you need to pick off strike lengths.

If what you are saying is true then the feasibilty AISC estimates are out by a long way and it makes you wonder why they would have invested in two declines at Beresford? If you are right about it not being a less than $1,000/oz AISC UG operation, it makes you wonder how they could get their AISC so far wrong. We really need to wait for the June quarterly for confirmation but it is certainly worth taking a cautious approach in the meantime until the real steady state ASICs come out in the wash IMO.

There is no way of knowing what the AISC for my comparion example are with the grades quoted as NST don't publish this information any longer (only for their Kalgoorlie group operations) and TBR/RND have never published AISC only mine operating costs (C1 costs?).

Here are the costs as quoted from TBR/RND's Dec 2018 quarterly.

"Mine operating costs, incurred by the EKJV during the December 18 Quarter were $137 per tonne mined or $686 per ounce mined compared with the September 18 Quarter costs of $158 and $622 respectively."

Remember these costs were for grades of 6.14 g/t at Rubicon/Hornet and 5.96 g/t for Pegusus (vs Beresford 4.2g/t and Allason 5.7g/t) and the UG orebodies at Kundana are also notoriously narrow. I'll see if I can find some width comparisons when I get time. They have about the same number of declines at Kundana for roughly the same strike extent but less surface portals (openings) from what I can see. So Westralia should in theory be less conjested when it comes to sheduling traffic up and down the mine. One would need to more carefully calculate the ozpervm for all the depoists to really compare and also the mining method. Is Westralia really leaving pillars? vs Kundana paste fill. Esh

Expand

I can't help but think oz per vertical metre is a very rough way to compare the economics of different ore bodies, and like you say all these other factors need to be considered. Rules of thumb don't really trump a full feasibility study as I see it.

Having said that, we've seen some pretty poor feasibility studies recently in the junior space so nothing would surprise me.

The actual dilution so far from the first 115 stopes at Mt Morgans has also been in line with the feasibility study so not sure it could be considered 'unrealistic'.

DCN Price at posting: $2.42 Sentiment: Buy Disclosure: Held
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