There's dirt roads that are cheap. There's high specification...

There's dirt roads that are cheap. There's high specification motorways that can cost a billion dollars for even a 20 to 30km of road.

A cheap gravel road might cost 20mil CAD but I'd have thought a road capable of handling perhaps 120 heavy truck and 120 empty truck movements per day was going to come at a much higher cost than circa $300k/km. A quick google indicates a standard two lane asphalt paved road could be nearer $2m/km (see below. Source not verified).

I'm surprised nobody has commented on the circa $600m increase in operating costs that not locating the mine and concentrator together would add to WR1's life of mine cost base.

So Adina is a 59Mt resource currently with expansion potential. Lets assume the ultimate mining plan is 2.2Mt per year for 27 years.
Lets assume that while 60km in a straight line, the road required is 100km as a windy route is taken to dodge any lakes/hills that would be expensive to put a road over/through. From the pictures of the plant site, lakes appear to be an issue.

lets assume the cost of trucking is 10c per ton km (Gross weights limited to 60t would have cargo weights down nearer 50t. You won't get the 3 and 4 trailer road trains of Australia that help trucking costs). If WR1 is going to move 2.2Mt of ore along the road from mine to processing plant each year in 50t increments, the road will need to accommodate 44,000 truck movements per year (about 120 per day). That needs not just an all-weather road but a very robust all weather road. The annual trucking cost of moving ore from mine to processing plant on the assumptions above is $22m/yr of extra costs relative to a mine site based processing plant or $594m over the life of the planned mine. There's still the cost of shifting the concentrate to someone with a Hydroxide plant with available capacity, but that's a much smaller volume than 2.2Mt/yr.

While the project has benefits, it does create additional risks:

• How much will WR1 spend on C&M for the plant before the first ore goes through it?
• What happens if permitting and construction delays mean the road isn't complete when WR1 is ready to start mine construction?
• Having addressed the concentrator SB/SL start to talk about building a hydroxide plant at >$1b cost (as they did at Core before both some questionable issues for others to address)
  

Its a good idea to explore, but as shareholders all the risks should be properly covered off before agreeing with the purchase.