Here is a short synopsis regarding lead up to production basically outlined in laymans terms without going into verbose technical commentary. This was one of several posts I made regarding production lead ups for juniors a couple of years ago on another goldie.
See below:
Before I commence this post my view is not to ridicule anyone in particular, but to merely outline what is involved to bring a project to production in order to put things in perspective. ##### has raised some valid points yet in the scheme of things its a lot more complex than what meets the eye. Remember BCN is an explorer not a producer !!!!.
Going to production will depend on due diligence taken by a party as to whether they can perceive underlying value and profit from it. More importantly whether they will take a risk in the current climate. What are the terms and conditions ? what are the benefits to the shareholders?. Are management prepared to consider it at this current point in time?
Consider hypothetically you have a JV partner with expertise in production, before you get to a BFS stage you would require a SCOPING STUDY . What s involved ? Assessing the potential of a project and whether or not it is appropriate to invest time and more importantly capital in order to pursue potential of further development. More time = more effort = more capital outlay. Further upgrading of JORC resources would also rate highly in my books in terms of mine life.
Next step a PFS (preliminary feasibility study) whereby raw data has to be examined on all aspects of the project. The data has to be extensive enough to look at estimates such as operating costs, capital costs , staffing requirements-skilled labour pre production , post production, accommodation availability, value of the gold, profitability estimates, social and environmental impact data , plus risk assessments and marketability, future market trends, further metallurgy testwork analysis if required, etc, etc.
Other items such as ample power requirements, infrastructure will also need to be examined, on the surface this may seem o.k whats required is further in depth analysis and investigation. Anything above and beyond that is purely speculative at this point in time.
Re- PFS If all of the data is extensive enough, it can provide suitable information regarding commitment to a large capital expenditure and effort towards a final BFS . Previously Ive seen many different speccies over time where the PFS was not extensive and thorough in its analysis. Figures were subsequently released to the market where on the surface seemed o.k.
Consequently a coy then decides to commit to a final BFS only to release subsequent figures showing enormous blowouts in operating costs and capital expenditure. Projects become mothballed need I say more !!!!!
The PFS in other words outlays a foundation for a potential project and can be a determining factor whether the project has the potential to be a failure or success.
Hypothetically if a PFS is favourable based on all of the above, next step is a BFS or FFS (Final feasibility study) which involves all aspects of the PFS . The BFS is subject to independent audits from memory whereas a PFS isnt if it is funded from within house. Whats important is the amount of detail that is provided and to what extent risks have been assessed.
In closing my previous posts in relation to timelines for BCN are exactly just that and nothing more. Case in question see AAM who have just recently become a producer with 1.7 million ounces JORC. It took several years to bring the project to fruition from explorer to producer with virtually little debt. Yet it had many teething problems , timeline blowouts plus poor P.R through company announcements etc, etc. I have been with that one for a few years now since production was mentioned !!!!!!.
What we really need to see is further shoring up of resources above and beyond what we already have, plus tapping into possibilities outside of the 95% they havent touched as yet.
A capital raising for BCN may be required at some stage to further fund exploration & necessary studies if they decide to look at production which may see further dilution in the stock (more shares on issue) which Im not necessarily a great fan of. Once again there are ways around it though if shrewdness prevails.
Suffice to say BCN Management will hold the key to unlock its potential , I sincerely hope due diligence is undertaken to maximize benefits to all parties concerned in a timely fashion with regular updates to shareholders rather than vague rehashed diatribe which keep shareholders in the dark that many other companies are famous for .
Time will tell.
cheers
BCN Price at posting:
1.6¢ Sentiment: None Disclosure: Held
