My guess: ore sorting has a positive effect on Korbel's...

My guess: ore sorting has a positive effect on Korbel's economics, but having 'too much' ore sorting or 'too soon' does not maximize IRR.

Eg. if they did ore sorting up to 1g/t, and threw away 75% of the material (guestimate from memory), they'd actually need MORE ore sorters to have enough throughput for the 6mtpa plant or even a larger plant. Eg. $100m worth of ore sorters instead of $44m + $30m staged investment. It would lead to higher grade put into the mill, but maybe having CAPEX $20-50m higher reduces the IRR and thus the probability of development.

Or maybe the amount of indicated resources we have right now is limiting the amount of ore sorters that makes sense to include in the calculations (to maximize IRR and NPV).


I guess ore sorting works to an extent, but it not a magic wand to be able to process all 9moz+ that we have. Plus Cathedral for example is all inferred, so was likely not included in SS2's calculations.

Possibly if more inferred was upgraded to indicated, it might make sense to: up the grade coming out of the sorters (tossing out more to waste), and up the amount of sorters (to meet the 6mtpa throughput). Leading to: higher CAPEX, higher grade, same mill throughout, higher NPV, similar or higher IRR?

Some justification:








Screenshots show:
- M&I vs Inferred mined ore is 74:26 in SS2. ASX rules probably demand this - not allowing more inferred to be used.
- M&I is currently 3.4Moz. 9.9Moz when including inferred, which includes Cathedral.
- Production table shows 3.26Moz mined over LOM.
- 74:26 suggests the production profile includes 2.41Moz of the M&I resources (3.4Moz available) and 0.85Moz of the Inferred (6.5Moz available).
- That leaves 0.99Moz of M&I unmined and 5.65Moz of inferred unmined.
- If more of the inferred were to be upgraded, 14% of the total inferred is at RPM (0.9Moz) and 86% at Korbel+Cathedral (5.56Moz). SS2 already uses 0.85Moz of that 6.5Moz total.
- SS2 uses an average mined grade of 0.4g/t.
- If it was RPM being upgraded from inferred, then that 0.4-0.6g/t might be direct mill feed. If Korbel+Cathedral was upgraded from inferred, it would be 0.2-0.3g/t, requiring sorting. In that case, the numbers might benefit from greater investment in sorters.
- Based on the current M&I amount (the majority of it is used in the mine plan), and 6mtpa plant size, the current amount of sorters is probably fairly optimal.
- If wanting additional sorters to boost the numbers, we need more M&I to keep the plant throughput high enough.

So what next:
- Find new resources at RPM + Train, to add more direct mill feed. Must be >0.4g/t to be a noticeable boost.
- Convert more of Korbel+Cathedral to indicated, and then add more CAPEX investment into ore sorters, and then dial up the grade from the sorters (to keep the mill steady at 6mtpa).
- Either case should bump the average grade. But in the case of additional indicated low-grade, it would require an increase in CAPEX.
- Probably increased feed from RPM+Train would be more economical than ore sorting from Cathedral, so that would be the drilling priority - adding to the size of RPM+Train.
- If RPM+Train failed or was completed, then Cathedral could be drilled if going down the 'scaled up ore sorting' path, if it's still economical to ore sort in higher volume to get a higher output grade.
- Right now we might have 200% ROI on ore sorters CAPEX, but are limited by M&I resources. If adding more resources and then more ore sorters, and throwing out more material, maybe the ROI drops to 150% (but higher NPV). Those are example numbers. At some point it'll be less economical adding more ore sorters, but I think we're not at the optimal point yet - we can probably still add more M&I resources and more ore sorters to process it, leading to higher mill grade and higher CAPEX but resulting in higher NPV.