The appointment of GSA Global is a prudent move (insert sarcastic face here) BUT it also doesn't speak much of the previous geologists and companies that have "assessed", "reviewed" and "commented" on what is required to move to a PFS without the need for another analysis/review?
Just for the heck of it ~ a brief history and results all in one place
~ Encouraging Scoping Study ~ https://www.asx.com.au/asxpdf/20140311/pdf/42n97k9n3fj2q4.pdf ~ Encouraging Infrastructure Study ~ AECOM Australia ~ https://www.asx.com.au/asxpdf/20140729/pdf/42r2rv9cjgzycg.pdf ~ WFE increased interest in Hamersley to 70%, after completing the earn in of 51% after paying A$4m and spending A$6m ~ (Feb 2013) but there is no additional information (that I can find) on the cost for the additional 29% increase? ** Thats were is all ceased, the Iron Ore price made the project unviable, the company chased other assets, but as it stood then, the project was "ready" to go when Iron Ore prices improved ..........
As indicated: (i) the SRK 2014 Scoping Study confirmed WFE could start a mining operation with a dry 2 mpta DSO product (ii) Perth based geological consulting Al Maynard & Associates (AM&M) engaged to: ~ (a) prepare a new Mineral Resource in accordance of 2012 JORC ~ (b) remodelling of historic drilling results ~ recommendations included (but not limited to) infill drilling into shallow CID & DID prior to a PFS, further metallurgical test work ~ a figure of A$117 was used at a conversion rate of US$ - A$ of $0.85c (iii) From Giffors's report: ~ (a) AM&A included tonnage versus grades and noted only a minor loss of 4% tonnage and a minor underestimation of Fe grade (+1%) ~ indicative of the robustness of the model, wireframe and estimation methodologies (iv) the then current board acknowledged all the recommendations from the studies as indicated in the 2015 Annual Report, key take aways: https://www.asx.com.au/asxpdf/20150930/pdf/431q960yg0hpf0.pdf ~ The Infrastructure Study was completed to compliment the Mine Gate Scoping Study to assess project viability and was focused only on the Indicated Category 42.6mt @ Fe~55.2% all indicating the project being viable at forecast Iron Ore prices (A$117 AM&A report) ~ (a) the company can start a mining operation with a 2 Mtpa dry Dry Shipping Ore (DSO) product ~ (b) supported with a cash flow after 3 - 4 years, the mine would look to introduce a wet Beneficiated Fines Ore (BFO) processing operation ~ (c) LOM expected to be minimum of 14 years for combined DSO/BFO operation at a Fe~57% grade ~ (d) 3 economically viable options identified to transport the ore to port, dependent on agreements with 3rd parties ~ (e) encouraging cash flow and positive NPV occurs at a wide range of I/O prices
~ Upon a return to Iron Ore prices that facilitate the viability of the Hamersley project, the next steps in the projects lifecycle ~ (a) Improve metallurgical knowledge of the indicated category ~ (b) base line environmental and hydrological studies ~ (c) geotechnical assessment of the mine exit road ~ (d) determine the condition and acceptability of the existing roads for haul traffic ~ from the infrastructure study all transport options included building a 8klm new road from mine gate ~ (e) commence discussions with local shire road owners to determine gaining access to the existing roads ~ (f) undertake marketing studies
Turn the clock forward 7 years and the "new" company has engaged another geologist consulting company (CSA) From all the previous studies/reviews and recommendations from geologists, geologist consulting companies CSA are to complete another review to tell them what the already know or should know??? The are an experienced board right?
@Justadabble CSA has been engaged to conduct: (i) a detailed analysis (AGAIN) of the geological model (ii) including a grade versus tonnage assessment (AGAIN) (iii) identification of higher grade intercepts (AGAIN) (iv) potential direct shipping ore (DSO) ~ (AGAIN) (v) which could potentially allow Equinox to fast track the development program (AGAIN) See above for all the identical work that has been previously completed (including recommendations) that CSA have been engage to do, ~ experienced management team ~ due diligence by (who?) prior to entering the purchase agreement for Hamersley or/and ~ no confidence in the service providers of the previous study/s? or/and ~ no confidence in the geologist (including recommendations) that provided the report for the prospectus? I wouldn't be holding my breath for drilling to start, it may be impacted by labour shortages across the industry, particularly Western Australia
~ If from all the reports, the 2015 A$117 was the base line to be viable, it would be very interesting to see how much higher this needs to be considering (something rarely discussed) the discounting that is being imposed for impurities above 9% of combined SiO2 and Al2O3 ~ The current price deviation of Fe~62% (I/O bench mark prices) and Equinox's (current) lower grade Fe~54.6% will also have a big impact to ongoing viability ~ assume that with metallurgical work, etc Equinox will come into the Fe~58% (which is what the price deviation is based on) https://www.copyright link/companies/mining/mineral-resources-smashed-by-iron-ore-price-penalties-20211026-p59342 https://www.copyright link/companies/mining/price-penalties-hit-fortescue-20211028-p593v6 ~ Iron Ore price https://markets.*.com/commodities/iron-ore-price Understand that Iron Ore is cyclical but based on previous posts indicating the sector analysts forecasting Iron Ore to be circa $80mt for 2022, add in the increased shipping costs (current) just headwinds ahead for Iron Ore.
Not convinced the company needed to rush out an appoint a Chief Operations Officer at this point, there is nothing to operate and the board is already getting over crowded, assume the "extra" staff costs were covered in the prospectus? No details of his employment contract? Corporate Administration budget for the 2 years, as per the Prospectus is $1,959,000 which covers general costs associated with the management and operation of the company business: (i) administrations expenses (ii) mangement salaries (iii) director fees (iv) rent and other associated costs As per the prospectus, wages/salaries prior to the appointment of the COO are currently $627,600 p/a (this will be slightly less for this year) with the "experience" that Fyfe comes with, and his elevation straight into a "senior" position could be a cost of between $155k (less experience) to $220k for the more experienced to which I would class Fyfe (as per his bio) making for an anticipated salary/wages cost of circa $847k without including the secretary wage? (a) MD ~ Taylor, Capped at $330k pa ~ $12,000 per month plus $1,500 per day for days worked above the contracted 16 hours per week (b) CFO ~ Pervez, $10,000 per month for provision of 16 hours per week (c) Non Exec Chairman ~ Baxter, $70,000 per annum (d) NED ~ Callaghan ~ $52,800 per annum (e) NED ~ Habib ~ $52,800 per annum (f) COO ~ Fyfe ~ between $155,000 - $22,000 per annum (g) Company secretary ~ ?
Rent ~ noticed that the company has relocated to their own office? or shared? considering that the minimum size of an office level 9, 182 St George Terrace, Perth is 149m2 @ the rental price is from $475 sqm = LOTS, ($70k per annum min?) plus a further $695 per calendar month if you want a car bay.
cheers
EQN Price at posting:
22.0¢ Sentiment: None Disclosure: Not Held
(20min delay)
