All companies stuff up from time to time and need to be called to account hopefully by shareholders rather than market forces.
BHP and Elliot = divestment of shale oil is an example of the former at the mega scale (doubt management would agree with this simplistic assessment though).
Kodak - does it still exist? after management made some decisions that were bad in hindsight.
If companies of this size, supposedly fully professional management and financial resources get things wrong some of the time what hope do the many small exploration company managements that are panned on HC have to get it right all the time?
Basically I am playing devil's advocate to some of the points made in this and other posts. As I understand debaters need to be able to take either the affirmative or negative side and the more convincing are considered the winners - doesn't mean they are right or wrong.
Acid Mou = BS! Reason shipping and costs. Where does it say acid will definitely be shipped overseas?
Wherever ~1.3Mt of sulphuric goes after any processing of Walford Creek ore it will need to be shipped. Hopefully to a nearby fertiliser plant (good question to follow up on why not) but failing that somewhere thousands of Kms away in Oz.
Involving Mitsubishi for insights and backstop (overseas?) is not IMO BS but possibly a wise decision that only time will tell as to how wise.
In ground and factory gate value of mineral products always look spectacular but the real question as you say is that PEA's DFS's deal with is will they make money.
Phosphoric acid - $385M =?profit
$5.7B Cu Co or $20B=??
PEA - 1.42eq%Cu ore; 1.2% production cost = ?profit
Now a couple of ways to look at this.
Does it mean the 15% profit in the simple 0.22% difference doesn't represent an uneconomic resource. Not good says Speccy and I would suspect AML were not too happy either.
However, they have spent a significant bit of coin to produce this PEA which they HAVE TO REPORT. Some spin is possible but the figures are open to analysis and further study (DFS underway on very different resource model).
Why is this staggering incompetence?
While it may not match up with world averages for OP shallow deposits the question is why? This cost curve, below, is for nickel but shows the wide range possible that comes with most commodities.
The reason why a deposit fits at a certain point on such a graph is not something a company can control in many ways. AML do have input on some parameters but need to be able to satisfy JORC rules.
Cobalt recovery 48 vs 90%?? Did they use 48% because it was the most up to date value allowable under JORC? Questions like this need to be answered before making judgements.
Metallurgy tests ongoing (SH action). A lot of Cobalt is tied up in pyrite - different to others?
The PEA is probably irrelevant now that the drilling has confirmed the new geological model.
What would have happened to Walford Creek if AML had made "the deal of the Century". IMO the new geological model and potential resource increase inherent along the FRF would probably not have happened in the same time frame and not for many years. Good or Bad?
Century is a effectively a Zinc mine. Walford Creek Cu Co Pb Zn Ag Py? How much compatibility/synergy? How did this impact on management's decision?
As Kemj, Speccy and others acknowledge that Walford Creek is an excellent deposit. Keeping management on it's toes helps the company and SHs. I would like to chat to management at meetings or in other ways.
(20min delay)