Ann: Caula Confirmed as Tier-1 Project -Graphite Assayed as Jumbo, page-83

A little food for thought for those with an open mind:

The production chart in the last announcement can provide a lot of useful factual information that I believe assists greatly in fitting the Mustang jig saw together. Just looking at the chart it is easy to see that 147k were produced during a 10 month period. There’s lots more to be found if we lose the first two months of low production though. In other words ignore those two months and we are left with 8 months and production of 147k less the production that occurred between Oct 16 & Dec 16. By measuring the height from the horizontal axis at Dec 16 up to the up to the 20000 line (which is 10mm) we can see that 1mm represents 2000crts. Now if we measure from the same place to the red line (which is 3mm) we can then by proportion deduce that the 3mm distance represents (3 x 2000) 6,000 crts.

So now we get back to the last 8 month section of the chart knowing it shows production of approx 141k (147k – 6k). Because the actual red chart line for this period is close enough to a straight line (except for a couple of minor little bumps) it means that production during those 8 months was very consistent. ie number of crts produced in each of those 8 individual months would have been very similar: 141k divided by 8 (months) = 17.6k/month. This figure is a fact, it is not negotiable. Hopefully you can see that there is no distortion or skulduggary involved in constructing it. When it is multiplied by 12 it shows the annualized production as 211k pa, which, by the way happens to be nowhere remotely near the 500k that a certain party would have you believe.

But hey, we know from Davisite that Artisinal prdn was around 30k/month early on but for the last 7 weeks was down a massive 66% to below 10k. This was cause for much concern to me, I would of course like to see crts increasing, not decreasing dramatically but I know now that this decrease is exactly what was required and I am very pleased. But hey again, Davisite also tells me that if they want more crts management can very easily redirect the Artisanals back to work in that original area. This I assure you will not happen because just like that old advertisement that says “oils aint oils” well similarly, carats aint carats – meaning some carats are worth only about $25 while others are worth a massive $100,000+. The 30k crts that the Artisinals were collecting originally were of course predominantly low value ones, the stuff that we don’t really want. I know from conversation with CJ that he is very focused on redirecting efforts away from the cheapies and towards the big bucks but at the time I didn’t know just how he would achieve this but I certainly do now.

So if there’s about 20k per month less of those low grade crts now how come monthly production is not falling too ?? Easy answer is mining output must have increased despite the fact that throughput I assume has probably been fairly constant. There can only be one reason behind this very pleasing improvement and that is that the feedstock for the plant now contains more rubies (predominantly high quality rubies too of course) ie the Artisinals are doing exactly as directed by CJ and are now successfully locating better feed stock while collecting only 1/3 as many low value crts. Now I hope you might understand why I say they are not likely to be sent back to that original site to collect more low grade crts.

The number of crts being produced is of course important but it is not paramount. It is by no means the only consideration, the quality of the crts is extremely significant.

Production of mined crts for the last 7 weeks has been at the rate of 1,572/wk. Now remember this is where the high quality rubies are mostly found. The good news is that this figure has recently doubled because of the plant upgrade. Last ann tells us that production of mined carats is now between 500 and 760 per day. If I simply use the average (which I personally think is a little generous) of 630 and multiply by 5 (assuming 5 day week) I get 3,150crts/wk, almost exactly double the previous figure.

So comparing earlier production with curent :
Artisinal’s were producing 30k/month or 6,522kcrts/wk and mining was producing 1,572crts/wk
whereas now Artisinal’s are producing only 2,236crts/wk and mining is doing 3,150crts/wk
An absolutely dramatic rebalancing has been achieved by CJ.
As a ratio it looks like this: Artisinal cts v Mined cts, before 4 : 1, but now 1 :1.4
ie They have moved from producing 4 low grade crts (Artisinal) to every potential high grade crt to now producing 1.4 potential high grade (mined) crts for every low grade (Artisinal) crt and this of course should continue for the remaining 9 or so weeks till auction day.

Production now is around 2,236 cts/wk Artisinal and 3,150 cts/wk mined giving a total of approx 5,386 crts/wk. If I multiply this total by 9 (weeks) and add existing stock of 147k I get 195.5k as the probable auction target. I would not be surprised however if CJ finds a way to round up a few more though. Maybe work O/T for a few Saturdays or hand pick the stockpile or what ever.

With this major change I would reckon that there is now a very real possibility that at auction we could see towards 50% or less in the low quality category. If not this time pretty certainly next time.
IMO



Wombat,

“Independent Investment Research assumed 70% "High Quality" at USD $400/ct and 30% "Low Quality" at USD $50/ct.”

From my experience good mining company analysts are few and far between and the guy who wrote this IIR report in my opinion is not one of them. My first thought when I read it was that he has got his ratio back to front. Invariably such reports are biased towards the conservative. Even reversed at 30% high quality and 70% low I would not consider it as conservative (although recent revelations would indicate otherwise). He is clearly not good with numbers because his percentage calculations are wrong: 264,600/453,600 is not 70% and 113,400/453,600 is not 25%. He has not included the 75,600 cts from Prospectors anywhere in his percentage calcs. You surely can’t place any faith whatsoever in this document – good for nothing other than toilet paper.
Much better off comparing photos or throwing darts at numbers.

IMO