Rumble General, page-447

Some of the issues with the zinc mineralisation in RTR's projects is that it's relatively low grade, would also require substantial pre-stripping of waste prior to mining ore, and finally the geometry of the mineralisation.



The depth of the waste overburden is significant. That means that the first few years of mine life in your main pit is negative cashflow because you're paying mining costs to remove waste, with no ore being mined. They might be able to offset this somewhat by starting smaller satellite pits first to get to ore quicker, but the waste still has to be removed.

Secondly, flat or low-angle orebodies are not ideal for open pit mining because there is no opportunity to assess the accuracy of the Resource estimation until you start mining the ore and reconciling it against mill production. But by then you have already committed substantial capital to remove all the waste on top. If in year 2 or 3 you only realised then the geological modeling or Resource model was inaccurate, it would be ugly.

Steeper, or sub-vertical orebodies are less risky because there is early cashflow generation from early on in the mine life, and the opportunity arises much earlier to assess the quality of the Resource estimate and make adjustments as necessary.