It now makes sense as to why AVQ announced the capital raising before the drilling results from San Jorge. The majority of the results are sub 1% nickel, with some +1% Ni grades, which are thin and not extensive. Therefore, to get a JORC resource of any reasonable tonnage they are going to need to include the thicker lower grade intersections. This will mean the San Jorge JORC resource will be around 1% or sub 1% Ni. To make a direct shipping operation economic the nickel grade needs to be 2% Ni or above. Therefore, with these grades the San Jorge resource is not going to be economic irrespective of how many tonnes of the material there are. A 1% Ni resource is just not economic as a direct shipping operation. To have any chance of making this project work AVQ will need to have a processing plant, power, etc, etc, which will cost hundreds of millions. The project can not sustain that sort of capital therefore I can not see how San Jorge has any chance of working now. Getting Isabel back now is so much more important for AVQ as without it they are going to have a sub-economic project at San Jorge and nothing else. RM is now really going to have to earn his money.
AVQ Price at posting:
15.5¢ Sentiment: Hold Disclosure: Not Held
