Starting a new thread here to discuss the origin, history and...

Starting a new thread here to discuss the origin, history and implications of the Jul'22 Mine Plan Update (Update22). Not sure how many posts or long it will take me to work through, this way it's clearly on record for anyone interested. I generally write as I work and post un-edited one draft, the result is usually longwinded and more prone to mistakes despite my effort to always be accurate and substantiated. It is what it is but as always, i stand to be corrected, DYOR, this entire thread is not advice bla bla.

I refer to charts all the time, but not going to reference the timing of each event with one so here is a chart over the period in question. The rot set in March 21, 4-5 months before the 2021 resource bull market lost steam and commodity stocks generally all walked some early gains back.


2021 MRE downgrade was the shit sandwich caused the mine plan downgrade, but geo's and management drilling results would have been a concern before samples went to the lab, well understood once the assays came back. MRE's are generally an iterative process, where geological logging and computer wireframe models are created early then refined once all lab assays are back. Logging, geological interp and wireframing ore lode dimensions take the time, once assays are back the process to interpolate grades into the model, do the geostats and report is formulaic and fairly quick. Often the first draft (if not the final draft) MRE is circulated around the office and peer reviewed for months before release to the market...



It's important to note the 2020 Drilling program and 2021 MRE was instigated at Taurus's request. Finance companies use experts to review projects for risk and accuracy prior to lending funds, often resulting in unacceptable uncertainty or risk. Sure Taurus only contemplated increasing confidence in the Indicated Resource under-pinning the 2019 DFS, but their experts were concerned enough about drilling density and interpretation to instigate the infill drilling program. Quote from July'20 Taurus Finance Release... "The remainder will be drawable once the infill drilling is incorporated into the cash flow model and the model continues forecast compliance with lock up financial ratios".

I understand the MRE's but without hindsight there is no way I would have guessed that the 17% drop in tonnes and 13% drop in grade 2019 to 2021 MRE would impact the Mine Plan Reserve as savagely as it did. The language used in praising the increased resource confidence and mineralisation predictability was completely at odds with the implications of that 'light-bulb' re-interpretation infill drilling provided. There are hints buried in the geobabble section but overall the positive vibes and outcome is captured by last sentence in the conclusion. In short, the MRE was mis-represented imo and a material downgrade whose implications hidden from the market behind positive spin... "The outcome of the work shows that Abra continues to demonstrate its standing as a long-life, globally significant high-grade lead-silver project. Mine planning works for an optimised Abra mine plan have commenced."

https://hotcopper.com.au/posts/52768418/single I recommend re-reading the MRE post just to satisfy yourselves it was in no way a 'downgrade' release to market for a project on the verge of funding the results of a robust 2019 DFS. Mine Plan Reserves are always a subset of larger MRE's, so even a geo could not have known if Abra's 7Mt drop in MRE tonnes to 34Mt, had any material impact on the 16Mt LOM Mine Reserve. A majority or all tonnage and grade reduction could have come from peripheral MRE areas outside the mine plan with little flow-on impact on the mine-plan?

Technical people in the company with more information and context would have known full well the negative implications, withstanding some better and some shallower mineralisation in the north-west where early production comes from. 2019 MRE model top and 2021 below shows the interpretation changes that mattered. Orientation and scale of the models is slightly different what was previously interpreted as continuous thick ore lodes changed to discontinuous and/or thinner lodes. The upper flat Apron shrunk both ends and broke up into more detailed lodes, but the core zone in red was most problematic. Thick sheets of shallower dipping feeder veins into the Apron surface turned out to be multiple, steeply dipping complex veins. Boom... there goes your tonnes and overall grade (less high grade viens as % of global MRE) with dilution between high grade veins there goes your Mine Plan stope grades.


Steep drilling into steep dipping veins results in exaggerated ore thickness in core "drilling down dip". The southern end of Abra (RHS section) shows a thicker style of steep Core veins but almost certainly only because limited drilling does not allow detailed wireframing of multiple thin veins identified in the north. This Inferred Resource area in the south possibly nails the 'average' tonnes and grade close enough, but what, where and how the ore stopes work will not be known for some time. Again, a technical mining type would see the complex array of thinner, steeper vertical veins as a riskier mining proposition likely to generate lower grades (and possibly lower tonnes) than fewer, thicker, continuous veins as per 2019 MRE and DFS.

More factually, it would not have taken long to re-run the 2019 DFS Mine Plan across the new 2021 MRE and see once "infill drilling is incorporated into the cash flow model and the model continues forecast compliance with lock up financial ratios" as Taurus requested. Before any optimised mine plan was worked up, the outcome would have been a very substantial downgrade. We know this for sure because the Optimised Mine Plan when it was finally released, was a still substantial downgrade after a complete Mine Plan re-design and new set of assumptions to credibly squeeze every drop out until the pip's squeaked. Running the 2019 mine design, costings and assumptions would have been a sphincter releasing moment when the results were 'not enough ore at too low grade' in many places.

IMO, by 28th April 21 when the new MRE was released to market the company had already re-run the old plan and knew a simple update of the cash-flow model would not cut it. "Mine planning works for an optimised Abra mine plan have commenced."... indeed lol, and without haste. Not that the market could have understood, they had no data or context to work with and only a very positive MRE Update Release to go by...

Optimised Mine Plan changes up next time