Ann: 2022 Annual Report, page-32

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Fangk

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28/03/23

00:41

Post #: 66986223
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Originally posted by swandc: ↑

In reply to Frankg above; for some reason it wouldn't let me tag him in the reply

Hi mate, please point out where I said bad ..... simply said I was never a fan and still am not for the following reasons (but that's not to say its a downright bad project!);
(1) low grade at 1 g/t, do you actually comprehend what 1 g/t entails, let me spell it out, 1 gram of gold is currently worth approx $A94 .... that means for every 2 tonne of dirt mined/ moved (noting 1:1 strip ration as you need to move a tonne of waste to access a tonne of ore) you have revenue of circa $A94 and then you have the cost of putting every second tonne (the ore tonnes) through the plant. If this project was in a higher cost country like Australia it probably wouldn't even be feasible at 1 g/t. Additionally there are 2 additional risks more inherent with a low grade mine that can easily make a currently feasible mine unfeasible quite quickly as usually a low grade mine has a low profit margin per unit as such; Rising costs or lower prices achieved can easily sink a low grade mine; Here we have rising costs but luckily we also currently have rising prices. So yes I'd prefer a higher grade mine.

(2) Political or country risk, having been on the receiving end in the past of country risk in a bad way where a mine was shut down by a country (KCN) I would have much preferred them to have diversified that risk and had their second mine in another jurisdiction. I do understand that they are experienced operators in BF which would add significant advantages (PRO's) also but never the less personally I would have preferred to spread that risk.

So there's my 2 major reservations about the project, hardly think they are absurd comments to contribute to a balanced discussion, and for the record WAF are actually my largest holding in my portfolio (unfortunately so far) but would hardly mean I don't have faith in the management or their projects. Absurd would be investing without being readily able to identify or being blind to the above risks. Regards

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Well, I am not sure how experienced you are in gold mining business. But I fell into similar fallacy when I just started my investment journey. I bought in CMM when it just started their gold project. I wasn’t sure if scraping ratio of 4:1 is high or low, and the grade looked low. Some kind guru in the forum told me it could be doable, and took Regis as an example of successful low grade high throughput open pit operation. Ultimately we look at the feasibility, which is the most valuable indicator before real operation. And for Kiaka, the finance numbers look pretty impressive from the study last August. Long life of mine, AISC $1052. Certainly there could be execution risk and almost certain the costs will be more or less higher than currently expected.
I don’t want to go into the geopolitics debate , there are always cons and pros and very subjective. But we just need to respect those who don’t have the stomach to take the risks to leave. Cheers

WAF Price at posting: 98.5¢ Sentiment: Hold Disclosure: Held
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