They are essentially starting from scratch on the BFS. And they have to rely on as of yet to be found patches of higher grade IO between 30 to 150M from surface since they now would have to process lower grade dirt between 30 to 150M which apparently "restricts the capacity to generate positive cashflow"..... So more drilling to come and as of this stage no certainty they will find the high grade shallow patches. Pretty sad to have to depend on that looking at the wildly profitable projections made previously.
And where many thought the pipeline was the major driver of CAPEX cost...Well that is still in the plan. Apparently the cost of the processing plant is the real issue, which after a review by Stantec has been "significantly reduced" but is still seen as "excessive"...
So we are now depended on as yet to be found higher grade shallow patches of magnetite and the ability to reduce the already significantly lowered cost of the processing plant. They clearly mention they will need to raise significant cash to get there and we won't see a final BFS till June 2024! If they stick to the timelines that is. And really how realistic is the chance of seriously reducing the CAPEX further?
Non of this is even remotely inline with previous statements. Either all of that was total nonsense or they should just sit back and wait for the economic conditions to improve while the demand for high grade IO goes up.
Seriously...They are going to waste loads of time, money and dilution on all this and if inflation falls (looking increasingly likely) and supply line issues get solved (happening right now with China reopening) non of this is needed.
They are way better off just sitting back and wait for the world to go back to normal.
HIO Price at posting:
8.0¢ Sentiment: Buy Disclosure: Held
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