Hey Tangs,
Yep, like you, Hill 50 has been on the back burner for a long time. I guess the current studies show why, to some extent, because the AISC is clearly not overly exciting.
But after another read, this paragraph really does cement why I hold RMS, above pretty much every other mid tier producer in OZ.
RMS strategic planning has enabled them to continuously push out the mine life, whilst also enhancing their near term production. I look at the current plan as 2 sets of 4 year plans. Next 4 years centre on Penny/Marda/Tampia which in turn, allow RMS to pivot onto the next 4 year plans which will heavily focus on Edna Stage 3/Eridanus UG etc). In that time, through the large exploration spend $32m and counting, they clearly hope/plan to further bolster production to enable them to provide the market with the sort of mine plan, that a Tier 2 (but.. very close to 1) asset usually provides, with low AISC, high production.
Even the likes of RRL cannot provide a mine plan longer than 4 years, let alone RMS closest peer, SLR, which, honestly, provided just 1 year for its main plant.
Edna May Stage 3 as discussed, is basically highly dependent on a high POG. It's as simple as that. Whilst RMS also rightly has other smaller issues to deal with, like being able to drill out the Golden Point, which is of course, is important, as its a sweetner for the whole Stage 3, being low strip, plus... needing to move the highway etc. They basically have at least 3 years before any real contribution from Edna May Stage 3 would kick in anyway, so I also see no reason to rush option. That being said, if POG only stays around the current price, then they will still go ahead with it, but, hopefully capital costs will be less likely to go over budget due to all the cost increases being seen in the construction sector.
There are by the looks of it, still ways to enhance Stage 3, so for as above, no reason to rush.
Stage 3 is a little bit of a play on a higher POG, as has been discussed in the past, the overall AIC sits around $1950 AUD, which, is.. not low, not high, its just... ok. Hence why Stage 3 did not go ahead under the previous owner....
If you take out the Stage 3, the RMS basically was able to replace FY2021 production, which is still a great outcome (excluding Edna Stg3 was 333,000 ounces to the mine plan).
The only blip in the whole update for me is Tampia.
Now, as was mentioned by others, the conference call contained some discussion about having to be much more conservative due to COVID and the issues it is causing the sector. So the question is... is Tampia meeting expectations (though they have only just started mining!) or, is this more about simply holding back with what they believe is indeed in the deposit?
It is not a large amount of ore, but bears some consideration. I will be looking to see clarity on this in the future.
Galaxy U/G is a large addition to the U/G mining operations at Mt Magnet. Though it won't contribute until FY2024.
The scoping study AISC looks high initially, but when you factor in the smaller upfront capex, the AIC sits at $1910.
Eridanus U/G.
Option 2 for now, but... they want to drill a heck of a lot more before really commiting to anything. Plus, the Stage 2 goes for a few more years, so.... bit of a wait and see what else the drill bit proves up. Costs for Option 2 look ok, but, not exciting, mainly because its low grade overall. AIC approx $2080... hence they have lots of other more profitable options currently.
Here's hoping the visible golds proves accurate.
It would seem that the U/G access via Franks/Orion has either been paused, or... more drilling is required, either way, still early days.
Vivien - What a hero.
Very impressive 2 year extension to the mine plan. 30k p.a for 2 years is a great outcome. Hopefully they can push it out again.
Maybe even an open pit cuttback at the end (think this was discussed many years ago when they first purchased the deposit).
Finally, we will see more ounces from these two deposits in the next mine plan/reserve update. Even if they only convert 50%, then that would almost replace FY2022 depletion, before any other exploration success. Which, is a nice factor when looking forward 12 months from now.
As I posted earlier, perhaps now that RMS has a clear 10 year visibility mine plan wise, some sort of corporate action is the logical next step. We will see. Well done to all the staff at RMS. Great work is being done 24/7.
(20min delay)