Sept Q report is not going to show much in the way of financial improvement. This we are warned about so maybe assume that is priced in. The new areas will be rolling in gradually in Dec Q, which is underway. Better yields in the plant and lower per ton processing costs plus somewhat lower haulage costs from better grade Cu concentrate (offset by higher fuel prices?) will be in both Sept and Dec quarters. The average grade of ore in the next 8-12 months is going to be about 1.5%. This is not great, but have a look at the detail in the drilling results all around the edges of the deposit so far defined. But as the Demtel man used to say, but wait! There's more!
Printed off the whole ASX release -Nifty Copper Operations Update from a month ago. 4 Sep. The drill exploration intersections report for July and August. Did some statistical analysis, basic stuff.
1. There were 77 intercepts of ore all around the mine, and the simple grade average was 2.4%. Current projection for the next 8 months or so is 1.5%. Of these 90% were above 1.5%. Not one was below 1.17%
2. Region 4, which seems to have no plan to mine it in the medium future, turned in some beauties.
53.2m at 2.52%,
34.2m at 3.34%,
36.7m at 2.52%
36.5m at 2.71%,
21.95m at 1.93%.
Now that is tasty, yes?
Now, as a guy with training in statistics and management, I think I would be heading to these richer areas ASAP. MLX is in real need of + cashflow, and the new areas would deliver that in spades, comparatively. I'm not a miner, or a mining engineer but that is an outsiders management viewpoint, shooting from the hip.
It also tells me that Nifty has, like most mines, good and not so good areas of ore. Right now it is in the latter category. But if mining is continued to these areas, it will recover to grades much more like Aditya Birla was getting in the open-cut. Some have, reasonably suggested, that chasing lower grade or underground with its attendant higher costs is not good in the macro sense. But what this drilling is showing, it seems to me just now, the lower grade is temporary. It has not come at a good time, though, so common in mining.
Additionally much of the ore seems to be carried out on a long/huge conveyor line, so fuel costs now rising for most miners will be less of a worry unless the electricity to run the conveyors is generated from diesel fuel. Anyone know the story?
What will the books look like with Copper grades 60% higher? Got to get there first.
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