Where is the study?
I want pages of technical analysis and reports.
This is a grossly underwhelming announcement and didn't tell me anything.
Given the time taken, and the number of studies conducted, there has been no new information released. It does not tell me anything we didn't already know. It does not confirm or invalidate anything we may have assumed.
Ultimately, I was expecting something more emphatic...
"Subject to confirmation of the resource grade and quality from infill drilling due in April 2023, the scoping studies indicate a requirement to raise between $XXm and $XXXm (obviously I was expecting more accuracy than my numbers), and an estimated mining cost of $XX/t at XMt production rate per year."
Key items for me:
Infill Drilling Processing
Whilst the infill drilling was completed on the 18th October, the processing of the drill results from 85 holes is "expected" to be completed in April 2023 - some 5 months away.
"WAI considers Bekisopa to have high potential for further study due to its high grades, low impurities, positive processing characteristics and robust economics."
This does not tell us anything new.
We have known for 1.5 years that Bekisopa has high grades, the independently verified processing from ALS in Perth has told us the grades at surface are above 65%.
I was expecting the company to release a report for each of the studies conducted. These reports would combined to paint a picture of what is required, with a moderate degree of confidence, to go mining.
We still have these outstanding questions:
- What mining process will be adopted?
- How much water will be needed and what other environment or community considerations are needed?
- What equipment is needed and how much will it cost?
- Is trucking 2Mt of ore feasible? How about trucking 3Mt?
- What is the transport route like? How big (30t, 60t or 90t) can the trucks be? How much will it cost to ship 1t of ore to port?
- What roads and other infrastructure needs to be built to support the mining operations and a ballpark estimate of capital and operational expenses?
- What are the power requirements, and what are the options and indicative Capex and Opex costs?
"WAI also highlighted the key areas of future work focus to advance the Project, including extensional drilling along strike to potentially increase the current Mineral Resource Estimate."
We were always going to do more drilling, my understanding was this drilling campaign should have been large enough to prove up a DSO resource that would allow for X - X years of DSO mining at a proposed extraction rate of XMt per year.
Surely WAI could have said to the company "you need to prove up XMt of ore to justify the DSO starter.
"WAI states that exploration of the Satrokala project should also be fasttracked, as this project potentially is a Bekisopa “look-alike” that is closer to existing infrastructure."
What is not being said here? Why promote fast tracking another completely greenfield project that has only had an electro magnetic survey and rock chip sampling if the commercials of Bekisopa are sound?
Sure, Bekisopa may be more remote, but I understand it is 20kms farther from infrastructure than Satrokala.
Surely given the complete lack of infrastructure at both locations, it wouldn't result in orders of magnitude savings ESPECIALLY given that drilling and proving up a resource at Satrokala now would result in many millions more shares being added to the register and years more delays in going to production and generating revenues.
Why don't they just say "Explore Tratramarina because it is already on the coast!"
"Three project scenarios were studied by WAI"
Again, noting new here.
1) Establish a DSO starter operation, then:
a) Conventional iron ore mining at 2mm crush size
b) DRI mining at 75 microns
We already know this!
We wanted to know the indicative cost to set up a mine, and then the indicative cost to mine XMt of ore based on feasibly transporting that ore by road using trucks to a port.
Obviously the decision will be dictated by the price to do that type of mining, the margins realised and the signing of a binding off take agreement with a partner who wants that specified grade product.
"WAI considers Bekisopa to have high potential for further study and that each of the above scenarios is worthy of further consideration."
Of course they do. It means more work for them.
Stay in your lane.
Tell me about DSO mining, don't get distracted by the future when we have immediate priorities and challenges.
DSO revenues will give us the funds to unlock all of this other stuff.
Money = options, and we have no money at the moment.
Let's just acknowledge that longer term plans may change, and we can assess and cross that bridge when we come to it.
We do not want to go down the path of Hawsons Iron where the size of their project kept growing to the point where they wanted to build a mega project that probably needed to raise $5B (my estimate) to produce the ore at scale to justify the investment and dilution.
Akora and Bekisopa was NEVER supposed to be that.
"Low cost DSO starter in a low cost market".
"Geology – further exploration drilling in the as-yet unexplored area along strike;"
We know we have an inferred resource, and we have undertaken and completed infill drilling to address this.
Why even waste time and money to conduct this study if the data we have isn't suitable to form an opinion?
"Geotechnical and hydrogeological studies;"
These were not included in the first round of studies, so I guess these would be a logical next step, but what is needed to conduct these?
"Metallurgy – confirmation that simple crushing and screening will produce the required DSO product grades;"
"The plan" was for these studies to take 2 months.
Were these studies not conducted as a part of this phase?
What are the details of the "Metallurgy and Processing" studies that were supposed to have been undertaken as a part of this group?
You couldn't hire some equipment for a month to dig up some ground and see the results?
What was done here?
"Further analysis of port options;"
Again, "Port Studies" were conducted over 2 months. What was produced?
A simple internet search would tell you that the port at Toliara would present challenges.
What were the findings and the challenges identified? No capacity? No storage facilities? Not deep enough? Cost prohibitive?
"Further environmental and social work."
This was allegedly 3 months worth of work.
What were the initial findings? What are the concerns or risks?
I don't think anyone has expectations of Environmental and Social studies to be completed in a single 3 month period, but surely some sort of foundation was established upon which further studies could be built.
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This is an extremely disappointing result after 6 months of patiently waiting.
I am not expecting a bump in the share price off the back of this, and therefore not expecting any options to be converted.
(20min delay)