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Moonwalker101

210 Posts.

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03/07/21

20:31

Post #: 54262760
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Originally posted by wombat777: ↑

The strategy as outlined in the original PFS is a risky one in the current environment with borders closed and no certainty of travel. The reason is that it becomes very difficult for management ( namely JM ) to supervise an overseas toll refinery achieving the right product specification and consistent product quality from different mining stages.

Commissioning and ramp up stage is a critical stage in the life of a mining company. There are technical/production risks and they need to be managed.

Hence the decision to bring forward the construction of the wet process plant and add a refining stage. It allows in country fine tuning of the full production process during the commissioning phase and direct control to sort out plant / process teething problems if they occur.

There are also commercial risks with putting the processing of your primary revenue stream in the hands of an overseas refinery ( third party refinery going out of business, misuse of IP, etc ). Misuse of IP or plant feed was one of the concerns raised by some shareholders when the prospect of a product for the concrete market first appeared.

If ADN add to DFS optionality for DSO + toll refining as a product for extra cashflow I expect it will be for lower grade product where ADN have control of which ore feed gets sent overseas ( i.e. lower grade ore feed from the mine plan ). They would likely time this cashflow add on for Stage 2 ( hence after there has been time for borders to open and management can freely travel to supervise startup of the cashflow stream ). I expect this type of add on to only account for 10% to 20% of project cashflow ( so not the Crown Jewels in terms of revenue streams ). Really just guesstimate of % of cashflow.

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Always the voice of reason, thanks for sobering me up wombat.

Still, let's hope that the right technical strategy is matched by the right funding strategy. This is where my main concern is.

ADN Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
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General comments/chat, page-24248

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General comments/chat, page-24248

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