Well I am a rational shareholder of EXU and a rational ex-shareholder of RMS.
Let’s look at what we know about RMS.
1) EM stage 2 runs out of ore late in the Sept quarter. Probably likely to still have a good strip ratio for the quarter but late Sept quarter is a bit fague in terms of how many ounces are going to come out of the open pit during the quarter. This together with low mill efficiency is a factor, if the mill isn’t being fed at near full capacity, so could impact AISC and hence profit from this mine over the quarter.
2) As per RMS’s latest update (30/8/2018) the next available ore source for EM, Greenfinch, is still in the approval process (see quote from preliminary final report for FY2018 below) and only contains an ore reserve of 62koz.
“Approval processes for the Greenfinch pit have progressed and include an EPA submission, consultation with stakeholders, and engagement with the local Shire in respect of relocation of the Warrachuppin Road. Hydrology and geotechnical studies have been updated and Mining Proposal and Clearing Permit documents were submitted.”
Fact 1) taken together with fact 2) above means to me that it is very unlikely that the company will win any ore at all from its own tenements at Edna May in the Decemeber quarter considering various approvals need to be granted and the Shire road needs to be moved. In fact it sounds to me that it’s probably unlikely that ore will be won from the Greenfinch pit until the first half of calander year 2019. The mine plan shows 20,000ozs coming from Edna May and Greenfinch in the Dec quarter. Now unless they have mined and stock piled that ore aleasy I can’t see where they are going to get these 20,000ozs of gold from, certainly not from Greenfinch pit given the time frames IMO.
3) At Magnet most of the mining at Shannon has been waste and the company said it would only win a “modest” amount of high grade ore from the open pit in the Sept quarter before advancing into the UG development. What I see here at Shannon are costs in the Sept and Dec quarters for not much revenue. They also so far have won 7,6460zs of gold at a reasonable recovery of 91% (mined grade 1.34g/t, RG 1.22g/t) from the Stellar and Stellar West open pit but this pit is also coming to an end during the Decemeber quarter. At Water Tank Hill they have reached the base of the decline and the company has said that mining at Water Tank Hill is expected to be completed mid-way through the coming financial year. Another some what fague timeline which could either put pressure on guidance or help it depending on when they call it quits. The mine plan also shows ore coming from Hill 60 in the December quarter. Given the latest update (30/8) on Hill60 says
“Mine design and evaluation of the model is now in progress and the approvals process has commenced. A new Mineral Resource and Ore Reserve of 50,000 ounces and 24,000 ounces respectively was published on 6 August 2018.”
and from my understanding the ore at Hill60 is to be accessed from an underground drive from the St George decline (about 500m away), I really can’t see how they will be winning ore from this deposit in the Decemeber quarter as planned. Seems very ambitious to me.
So it’s up to Milky Way and Vivien and possibly some low grade stock piles to lead the way in the first half of FY2019. Good luck with all of that. Milky Way is one of the lowest grade pits that RMS has mined at Mt Magnet.
And by the way @smartdude you never answered my question.
What are RMS’s total ore reserves currently? Esh
RMS Price at posting:
45.0¢ Sentiment: None Disclosure: Not Held
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