Current resource is 2.5m Oz with NN and Pepper 1.9m Oz with indicated of 1.4m Oz including 1.1mOz for NN/Pepper.
They are focused on drilling Pepper to indicated and expanding resources this half year. Simon seems to be looking at Pepper being 1m Oz by end of 2024 and if we assume 70% conversion to indicated (NN is currently 73% indicated) we have 700k Oz indicated or overall 2.1m Oz indicated with NN/Pepper being 1.8m Oz.
If we assume a 90% conversion of indicated to a reserve we end up with a reserve of 1.9m Oz with NN/Pepper of about 1.6m Oz. Simon has publicly stated the reserve will be well north of 1m Oz.
However, I sense there is upside to Pepper since holes to date suggest it’s grade is significantly higher than NN and I believe the 1m Oz may end up being on the low end of a range up to say 1.2m Oz. NN UG existing grade is 9g/t so a Pepper grade of 11+ g/t is possible with more drilling (Simon has stated the Pepper grade will increase from the current 7.7g/t) - that would increase the resource for the existing MRE area to 625k Oz (from 438k Oz) just based on a higher grade without extending the orebody. If the extended ore body with the higher grade extends at depth then it won’t surprise me if the next MRE for Pepper is around 1.2m Oz and with 70% indicated the reserve ends up at over 2m Oz with NN/Pepper being closer to 1.8mOz.
Could there be even further upside?
SPR Price at posting:
$1.42 Sentiment: Hold Disclosure: Held
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