I think perhaps I’ve gotten overly alarmed about the potential extent of the problem - I am no miner or geologist, and the announcement left immense room for doubts.
I’ve read a bit more, and still no geologist but don’t see the possibilities as so open ended.
Despite only referencing 5 samples used for mine planning in the DFS, they do appear to do extensive assaying of samples, for arsenic along with a host of other elements, as reported in the JORC notes for their reserves.
It appears to me from a little bit of googling that nickelite is present in other Widgiemooltha mines including Mariners and Miitel and has presented as veins requiring more ore body knowledge and mine planning to deal with (but clearly hasn’t stopped economic exploitation). Found no mention of nickelite problems with the (northern) Kambalda mines.
From this I am tentatively assuming they’ve encountered nickelite pockets or veins or whatever in Cassini, which wouldn’t have been picked up by relatively coarse exploration drilling, but that there was enough assaying to know that the ore body in composite is not compromised.
If I am correct, they’ve stuffed up execution a bit, but it will be resolved in the medium term by more ore body knowledge, revised mine planning and by blending. Short term will require some stockpiling and the ramp up of concentrate sales will lag mine production. They will lean on experience from Mariners and Miitel.
I would be interested in any correction and/or extension on the above from any with the relevant mining/geology expertise.
Whilst my concerns about the arsenic are largely allayed I have become concerned about credibility, transparency, and competence. I am left wondering whether there is something more to it, or something unsaid wrong with the ramp up?
Not selling as I still believe in the value of the assets, even if I’ve lost some confidence in the management.
EL
MCR Price at posting:
$1.41 Sentiment: Hold Disclosure: Held
