Increased throughput will only bring mining costs down if the grade being mined is higher, ie won’t happen until Nugent is online. What it does do though is reduce cost of processing as fixed costs are spread over the greater throughput, thus reducing cost per ton of ore processed.
Main reason for share price weakness imo is the market is awaiting more certainty around expected life of UG mine, this accelerated drilling program should shore up the reserves so a longer term plan can be formulated thus bringing more certainty to future and thus the share price.
I like the location of the South East exploration permits, they are all close to Dukes Hwy (National Highway 8 which runs between Melbourne and Adelaide) so any discovery could potentially be trucked via highway to the Kanmantoo processing plant which is only about 3km off the highway. I would like more detail on what exploration HGO has already done and their prospects. Guess I have a heap more research to do to find this out as it is probably available to some extent.
HGO Price at posting:
3.7¢ Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)