Huge impacts on potential annual production, cost of production and of course life of mine.
Looking at the indicated category and Alistair's comment, looks like an initial ~1moz reserve at 1.3 - 1.6g/t is coming.
See table below, this would translate to ~200koz per annum with net profits to FFX of ~$200M AUD each year for approx. 5 years based on the mine's historical cash costs.
Now we just need to infill the other ~1.2Moz to convert to reserves, and continue exploration to grow reserves out to 20+ years, which shouldn't be a difficult task given FFX seems to hit gold everywhere they drill.
Alistair's comment about medium term investigating underground mining at Morila NE and Samacline is exciting.
Perhaps they are considering bolting on a modest underground mining operation. This would be low CAPEX and could be funded via cashflow and provide huge IRR due to existing infrastructure onsite and the high grade of the UG deposits.
This increased throughput would raise the glass ceiling on the project. See below how the production output changes if the total capacity of the mine was increased from 4.5 to 6Mtpa:
The AISC might surprise to the downside as per the historical cash costs at Morila - see below:
Tailings are being produced at ~$1100/oz at 0.5g/t grade and 50% recovery. Obviously tailings don't required grinding, however the fresh ore with ~3x higher grade and almost 2x higher recovery will more than offset this, so I'm quietly confident that the AISC will come in lower than my estimates in the tables above.
Take note of how close the deposit is to surface (see cross section below) - this is huge as I was expecting mega pre-strip CAPEX, however it looks like it is outcropping at surface in some areas, so pre-strip CAPEX should be minimal if anything, if staged optimally.
Also take note of the grade, that region there from surface is largely 1.8 - 5g/t, which will have a huge impact on production quantity & AISC from day 1.
There is so much news flow to come, so many gold deposits identified (the hard part), we now get to sit back and follow their extents until they are fully defined. This is company making in itself.
I'm looking forward to the maiden resource for Koting, and progress at the other satellites. There should be a few hundred koz there to bridge us to Morila.
Then we have the goal of hunting for a repeat of Morila with >5g/t grades always on the horizon.
I hope institutions see the immense value proposition here for long term reliable profits from Morila - a large, long life and low AISC gold mine. Institutions will be key to increase demand for shares, to drive up the SP from weak retail hands.
In other news, I wonder what the impending lithium update will entail...
(20min delay)