I thought it worthwhile to have a closer look at timescales from a risk perspective ... the shorter the development, the less complex the project and the lower the risk.
So I went through the announcements for GOR and ADN just to see how ADN compares on a timescale perspective.
For each project I've taken the Scoping Study as the start point. For ADN I have used the Wet Processing Scoping Study.
The ADN DFS is likely to be completed by the end of this year and if first operations are to commence by the end of 2021, ADN would need to be awarding contracts for site works, pre-strip and mining by the end of June 2021. That would allow mining to commence in the December Quarter of 2021, allowing for shipping time I think first toll-refined product would be produced in Asia by the end of Q1 2022 as an assumed date for commercial production. We've been given a 15 month timeframe for payback - that would be from first works and so can estimate payback being achieved at the end of 2022.
Even though GOR has been a well-executed project. It had delays - about 9-12 months on their original timescales. First Gold was ultimately 1 July 2019. They had problems in construction and in commissioning ( I went to one of the investor sessions last year and they talked about the problems their supplier had tuning/programming the ball mills ).
View attachment 2199169From a risk perspective, after funding is achieved - the riskiest part of any project is construction and commissioning. The time period between contracts being awarded and commercial-scale production being achieved. Any delays here will ultimately extend the payback period.
For a complex mine, such as Gruyere this period between first contracts and commercial production is over 2 years - in GOR's case over 2.5 years. I'm expecting the equivalent period for ADN to achieve all important cashflow
to be less than 1/3rd of the time.
View attachment 2199157Now let's look at time period from first contracts to payback. I'm expecting GOR to achieve payback at the latest by the end of 2020. For them that will be 200 weeks or about 50 months. They have been saved by the booming gold prices. Their original payback period was 48 months, but they had about 9-12 months of delays so payback would other wise have been up to 60 months. The booming gold prices have allowed them to makes some great progress reducing debt.
I'm expecting ADN to achieve payback in about 1/3rd of the time.
View attachment 2199163Now let's look at overall project timeframes.
For ADN we are looking at less than half the time between Scoping Study and Commercial Production ( 2 years for ADN versus over 4.5 years for GOR ).
Between Scoping Study and Payback approximately 2 years 9 months for ADN versus just under 6 years for GOR.
View attachment 2199175We may see timescales change with the PFS and I will update the analysis if there are any significant changes.
(20min delay)