MKR

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4.1¢ manuka resources ltd.

Ann: Resource & Production Update - Completion of Phase 1 Gold, page-20

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edshann

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15/03/22

01:36

Post #: 60189596
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Originally posted by happybear45: ↑

I believe it was stated at $35 to process a tonne.

"The stockpile grades 70 grams of silver per tonne and is included in the company’s JORC resource statement. Importantly, there are no mining costs associated with such piles, only a processing cost estimated at $35 per tonne."

In a recent video Karp said the stockpile is nearly "3 ounces per tonne" of silver rather than the 2.25 ounces per tonne as indicated. To me that is a big difference between 2.25 and 2.75+ or whatever "close to 3 ounces" is so maybe they think it is more which is good news but lets just use the lowball numbers.

If you go with 2.25 ounces per tonne and 85% recovered it is $67.5 made per tonne [currently]. That $35 estimated cost was before the recent diesel price hikes, so if we go with a doubling of diesel price over their estimate to "cover the bases" it will be around $45-50 per tonne in processing. Leaving $17.5 to $22.5 in "profit" per tonne, with the assumption diesel is double their estimate when I think it is around 1.5 their estimate right now.

At 850000KT/year processing capacity, that is 71000 tonnes per month so that ends up being $1.24M to $1.597M in profit per month. The 850000KT/year number is pulled from their old equipment, their new equipment can likely process about 20% more than indicated per month. But again best to go with the lowball numbers.

I suspect they didn't add ALL costs into that $35, I have a feeling some of the "admin fees" aren't included but not certain about that. So tack on another $500000/month for that because companies love to grease their own wheels. 0.74M to 1.097M in profit per month on the silver currently. These are very conservative numbers, I'd expect maybe +20% in actual ounces per month than these numbers indicate.

So my estimate is it costs them around $27 AUD an ounce and they should be making some profit regardless unless silver tanks really bad. And obviously every cent silver rises from now is going to increase profits, if silver hits $50 US than they'll be making 5.7M AUD (6.84M less conservative) in profit per month.

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Am I right your numbers suggest cash flow of $9-13 million a year from treating the stockpile? The market cap is $80 million so hardly a raging buy, given we have yet to see what the stockpile processing can actually deliver.

MKR Price at posting: 28.0¢ Sentiment: None Disclosure: Held
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