Allied's biggest problem is moving about 2 million tonnes of gold "ore" per year (overburden too) about 10 kilometres from the open cut mine to the processing facilities near the port at sea level.
The most obvious solution would be to build a wide road from the mine to the coast and then use bulk ore trucks to do the job. But this large removal of ore at about 8000 tonnes per day would probably require about 10 bulk ore trucks and ten drivers and huge fuel costs.
So searching for a cheaper solution suggests that the ore could be slurried to the coast. This involves huge pipes and the crushed ore then washed down the pipe with water pumped up to the open cut mine. This is a cheaper solution (low labour costs) but this would require lots of electricity or other fuel to pump the water up to the open cut.
An even better solution that requires almost no power is to convey the ore down the mountain on a wire rope system - almost no power required as the ore moves down because of its own weight.
My guess is that the engineers designing the wire rope conveyor system underestimated the problems associated with such a system and they have had to go back to the drawing boards to make the system workable. Somebody probably pointed out that the proposed design would not work.
Will there be a cost blowout? My guess is that the new design will only cost a few extra million, which is probably not highly significant for an enterprise that will probably be turning over about $50 million a year when it eventually produces gold.
ALD Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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