A couple of observations.
The positives first:* The ES only has the plant operating at 40% capacity.
* Since the ES study was published they have discovered more lodes close to the proposed stopes that could add high grade ore faces that can be mined to lift production at incremental capital cost.
* Cu production could rise to circa 27Kt of copper running the plant full at a price that makes dropping the cut off grade to 0.4% profitable. See my spread sheet notes for assumptions.
* Adding Halo ores to the stopes doesn't involve additional development cost and increases the possibility of not leaving any of the high grades behind.
*They are working on increasing gold recovery from 55% to 85%
The Negatives:*The E in a PE ratio is the net profit after tax which is free cash flow from operations minus corporate costs, depreciation, amortisation, interest and tax.
* There has likely been a decent bit of escalation in costs since that AISC number was published.
* Only companies with MREs that support a very long mine life are likely to trade at a PE ratio IMO.
* Whilst HGO has massive potential resources close to the plant in exploration targets it will be a while before they find their way into an MRE.
* HGO will likely trade at circa 3x free cash flow in the mean time IMO.
