Ann: Compelling Ore Sorting Work at Reward, page-8

I thought I'd play around with the blue sky potential that one of these ore sorters could have to production to the PFS and if there was exploration success at Fosters or south star etc.

As the quarts hosted gold ore along the whole Hill End anticline seems to be homogenous, even all the way 20km north to Hargraves one could expect similar ore sorting results, especially in the closer high grade deposits to the south of Rewards like Fosters and South Star, however, one should not rule out the bulk tonnage deposits like Red Hill providing ore one day as well.

Tomra Pro Secondary Laser sorter 20mm-120mm - Can sort up to 100t/h
Have increased recovery to 95% due to the increased mill grade

Secaniro 1 (current pfs)
- Sorter runs 8hours a day, 5 days a week, with ore sorter operating @ 50% (50t/h) =104,000t/pa
- Mine 104,000t/pa @10g/t
- Sorted @ 90% efficiency (104,000/3.3)= 31,515.15t x (10x3.3)= 33g/t = 1,040,000g x 90% efficency= 936,000g x 95% recovery = 889,200g= 27,787.5oz pa
27,787.5oz x $3,500 = $97,256,250 revenue pa
One could presume with the efficiency of only running 5 days a week, reduced tailings and now processing a oz per ton ore the aisc should reduce 10-20% say to $1500 per oz?
$3,500-$1,500= $2,000 gross margin
=$55,574,000 EBITA before sustaining and growth capital

Secaniro 2- Second mining front at Fosters
(Will just use sorted grade of 32g (troy oz) per ton for ease of calculation)
- Sorter runs 10hours a day, 5 days a week, with ore sorter operating @ 70% (70t/h) =182,000t/pa
- Mine 182,000t/pa @10g/t- Sorted @ 90% efficiency (182,000/3.2)= 56,875t x (10x3.2)= 32g/t = 56,575oz x 90% efficency= 51,187.5oz x 95% recovery = 48,628oz
48,628oz x $3,500 = $170,198,427 revenue pa
One could presume with the efficiency of only running 5 days a week, reduced tailings and now processing a oz per ton ore the aisc should reduce 10-20% say to $1500 per oz?
$3,500-$1,500= $2,000 gross margin
=$97,256,000 EBITA before sustaining and growth capital

Secaniro 3- Operating at 100% plant nameplate (Blue Sky)
(Will just use sorted grade of 32g (troy oz) per ton for ease of calculation)
- Sorter runs 12hours a day, 7 days a week, with ore sorter operating @ 88% (88/h) =384,000t/pa
- Mine 384,000t/pa @10g/t- Sorted @ 90% efficiency (384,000/3.2)= 120,000tpa x (10x3.2)= 32g/t = 120,000oz x 90% efficency= 108,000oz x 95% recovery = 102,600oz
102,600oz x $3,500 = $359,100,000 revenue pa
One could presume economies of scale, reduced tailings and now processing a oz per ton ore the aisc should reduce 10-20% say to $1500 per oz (probably a lot less)?
$3,500-$1,500= $2,000 gross margin
=$205,200,000 EBITA before sustaining and growth capital

There are a lot of variables baked in the above figures like gold price, recovery, sorting results, grades etc. these could decrease but also have the potential to increase so its probably to a bad representation for now.

Scenario 3 seems far-fetched but at 384,000t/pa mine its is still considered a small operation in the big scheme of things. It does show how much this is leveraged to exploration success and as the cashflows from secaniro 1 (our current situation) is still very strong we should have plenty of money to explore thoroughly once in production so there is a very high possibility of finding a lot more high grade oz's t fill the small mill.

Think we should have the new pfs in the next couple of weeks which should show a massive reduction in the loan required due to delaying the adit expansion which should massively de-risk the project.

Exciting times ahead.

All IMO DYOR

Cheers