Ann: Annual Report to Shareholders, page-57

Thanks for the detailed reply @VinceS2. Agree there are always downtime issues with DMu's, as with all plant, but that looks accounted for in design imo. You say "in steady-state production this will all balance out, just"... which seems misleading because you calculated sand movement on 3 x 1500tph DMUs (2 x ore feed = 3000tph or 26.2Mtpa, 1 x overburden) to 'just' balance out required 23.5Mtpa ore feed design. The DMU's are rated at 1750tph but assumed to perform at only 1500tph to account for ~15% avg downtime to "bust the heavy-duty Joest screens ... lots of ginormous lumps of agglomerated sediment / whatever", breakdowns etc.

2 x 1750tph DMU's always on ore feed would process 30.5Mtpa at 100% availability, when the mine only requires 23.5Mtpa, so DMU 15% unavailability seems both reasonable by industry standards and process design. Add to the the flexibility of an extra DMU to cover DMU shifts and whatnot, even with overburden requirements the issue of DMU capacity vs design is one of marginal semantics I say. If Coburn only reach 95% DMU feed to WCP we could argue the DMU's were under-sized or downtime under-estimated, but at only 50-60% feed to WCP there is clearly something other than under-sized DMU capacity in play.

Water running into a deep pit sitting on impermeable clay basement can be a real problem, as they found out when tailings water added to the pit water ponding problem. Fixable at capex/opex cost, but if it's bad enough they have to stop DMU processing for long periods because they can;t just spray tailings all over the place because it will cost a fortune to shift into the pit for rehab at a later date. Is there more indurated and/or slime heavy layers that 'clog up' the DMU's?... that could be a fatal problem preventing required very high tonnage DMU performance. There are other incremental downsides that could hurt badly, such as 10% or more grade over-estimation in mine reserve, but again the primary problem is simply massive under-performance of DMU slurry-sand to the WCP, which is guided to work at nameplate capacity, HMC production and recoveries so long as it gets nameplate feed in...

LG clearly decided long ago that retail will be updated 1-4 months behind insiders and Chairman's Lounge on what the issues and performance actually are. Shipping data tells us Sep Qtr is going to be very bad, as forecast by falling share price since end August. Without any knowledge of why HMC production is still stuck at ~50% nameplate another quarter after so many fixes were put in place by July, there is no way to guess what it means short, medium or long term unfortunately.

GLTA Mushrooms