Honestly, you should refrain from making technical observations without basis. How does the presence of coarse gold adversely affect the Crown Prince SEB mineral resource? Your reference to strip ratio is irrelevant. Passmore has stated that the maiden SEB mineral resource will be determined in the current quarter.
The presence of coarse gold is more challenging for geologists because grades are more erratic, hence the practise of top cutting when generating the resource model. The presence of coarse gold at SEB is a positive in my view. The old timers mined the Crown Prince supergene enriched ore to a depth of 90 meters. They reportedly mined 29,400 tonnes for 20,178 ounces at a grade of 21.7 g/t. The current Crown Prince resource of 479,000t at 3.6 g/t consists of the halo of lower grade ore that the old timers left behind. The huge upside of the SEB discovery is that it was missed by the old timers. It is probable that OAU can now define a similar resource for SEB compared to Crown Prince historical production, i.e, circa 30kt at 20 g/t. I am only speculating but I think most of the gold in the supergene enrichment zone is coarse and that has positive implications. Gold ore with primarily coarse occurrence can be treated with an inexpensive gravity circuit. Potentially the company could hire a crusher and gravity circuit to treat SEB ore provided it consists of primarily coarse gold. It is conceivable that a 90 meter deep pit, even with a strip ratio of 50:1 could be very profitable. Here are some back of an envelope calculations:
SEB potential HG supergene resource - 30kt @20 g/t for 20,000 ounces.
Cost to mine $5 per tonne.
Strip ratio 50:1 to a depth of 90m
Mining cost = 1,530,000t × $5 = $7.65 million
Processing cost for crusher and gravity circuit - $20 per tonne.
Processing cost = 30,000t x $20 = $600,000
General and Administration costs $10 per tonne = $300,000
Recovery - assume 75 percent of ore is coarse.
Production - 20,000 x 0.75 = 15,000 ounces.
Total costs = $7.65 + $0.6 + $0.3 million = $8.55 million.
Revenue = 15,000 ounces × $2,868/ounce = $43 million.
After mining the SEB supergene ore, Ora would probably have a low grade ore stockpile similar to the current Crown Prince resource, i.e, 479kt at 3.6 g/t (55,000 ounces). This would need to be toll treated or await a CIL or heap leach gold plant at Garden Gully.
The significance of today's result demonstrates the quality of ore beneath the supergene enrichment zone. Those sorts of grades and widths could very well persist to depths of 1km ore more at both SEB and Crown Prince. The SEB supergene ore could represent a significant opportunity to generate significant income with very low up front capital. Building critical mass below the supergene zone is the key to building a long term project able to support a stand alone gold plant.
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