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10/03/24
08:30
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Originally posted by WhatsTheTip:
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For what its worth, I 100% disagree with your assessment of no infill drilling. There appears a distinct chance there's 400m+ of NW/SE strike length from the drill holes below. There's a distinct chance of 300m average widths. 400 * 300 * [guess 7m] * 2.7 = 2.3Mt at perhaps 1.4%. That's more than 2 years feed to a 1Mtpa concentrator but its not enough to justify the build of a concentrator. This simple area calculation doesn't factor in what might be around RCD43 (or deeper). The reason its more than 2 years feed for a 1Mtpa concentrator is why the numbers below are larger than may superficially appear sensible. MinRes in their market update noted they were looking at a Concentrator around the Mt Marion area that would contract process ore for Juniors that have small deposits but don't have the scale for an onsite flotation plant. This explores that potential. The infill drilling for all the intercepts below is simple and quick because the infill is rarely beyond 150m and often 100m or less. On that area alone you have several million ton's but more importantly a grade nearer 1.4% (not 1.0% as some other deposits are). What's the strip ratio on this? Most of the strip work relates to the area vertically above the pegmatite. The southern and eastern pit walls would be minimal beyond what's needed to get the ore out so its only the northern and western elements that would have a material pit wall and those walls might extend 100-150m beyond being above the ore. For really crude purposes, pit walls may add 40% beyond the waste rock physically above the ore. If the vertical strip ratio was 10x then the project strip ratio would be 14x. If waste ore was A$5/t to move you have A$70/t of waste ore removal costs and perhaps A$30/t transportation cost. You would start near RC07 so starting strip ratios and costs would be at their lowest in the startup phase. If the ore was capable of 70% recovery and was 1.4% grade, MinRes would need 5.6t for a ton of SC5.5. Lets assume the Market price was US$1,500/t for SC5.5 and MinRes needed a US$500/t profit. Further if MinRes had processing costs of US$200/t there's US$800/t available to be paid for the ore (A$1,140/t at 0.70). A$1,140/5.6 = A$204/t. MinRes could pay A$200/t for 1.4% ore if the market price for Spod was US$1,500/t. So add in some costs I've forgotten and TG6 might have $80/t of EBITDA as it sends 2.3Mt of DSO to Mt Marion operation. That's an EBITDA of A$184m which is an incredibly back-of-hand calculation, but on the current MC creates a lot of upside. MinRes would produce 410kt of SC5.5 from the 2.3Mt of ore. If they sold that for US$500/t of profit, they would make US$205m. That's enough profit it could be of interest to them in investing in the plant that would process this and other ore. This is of course dependent on SC5.5 prices returning to US$1,500/t average but when prices have been north of US$5,000/t its not an unreasonable estimate to work with. So, would I define the resource so that I can commence discussions with MinRes and try and get some of that A$184m flowing in? My view is yes, but you have already expressed that Burmeister too little, uneconomic and RIP. RC07: 6m @ 0.97% from 26m RC06: 9m @ 1.77% from 30m RC18: 4m @ 1.52% from 36m RC14: 7m @ 1.45% from 43m RC29: 3m @ 1.13% from 130m (steeper drilling) RCD09: 4.1m @ 1.74% from 132.5m RC10: 9m @ 1.36% from 113m RC11: 10m @ 1.80% from 86m (and as a nearby DD 10.5m @ 1.60% from 87.2m) RC31: 8m @ 1.56% from 64m So you have 350m of width that is mineralised. RCD24: 3.6m @ 1.11% from 171.6m TG22: 4.0m @ 1.15% from 173m RC33: 9.3m @ 1.43% from 139m (and another thin peg above that) RC30: 20m @ 1.13% from 129m (and another thin peg above that) RC46: 4m @ 1.41% from 130m
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Burmeister will never be mined. In February Josh using professional software concluded: Since then - the North was closed off by Thursday's multiple NSI's. You agree there is no hope to the South and East. IMO it thins to the West. But you also need to discount further for dilution. Blast movement and digging dilution limits the resource to minimum 5-8m individual widths (not cumulative). Min Resources at Wodgina assumes "10m minimum mining width and 19% ore loss" - https://clients3.weblink.com.au/pdf/MIN/02715088.pdf . That rules out a lot of intercepts, and the 20m hits look to be narrow and short. Hence my Burmeister conclusion, whilst very high grade, a too little resource and uneconomic to mine. No biggie. We had the soil anomaly and a PoW so we started there. Let's treat it as "a discovery hole" and ....... Bring on Jagger. GLTAH!