barrick gold opa

Morning People,

OK, so i may / may not be looking too far into the future, but i was wondering if anyone has any ideas or consideration of an upgrade and refurbishment of the Barnicoat Mill at Laverton. Guess all this talk of cap raising, which i believe is rubbish, got me onto this.

How I read it:
Crescent signed the current OPA with Barrick in June 2009 for a period of 2 years - to June 2011. In April 2010, they extended the OPA by a further 2 years to June 2013. That's only 19 months from now till expiry.

Granny Smith has a 3.5MTPA capacity which is under utilised allowing Barrick and Crescent to enter into a marriage of mutual benefit, however, Barrick have stated recently that once they undergo open pit expansion, they will be able to use all the capacity themselves. Quote "Capable of treating 3.5 million tonnes of ore a year, the plant currently processes 1.2 million tonnes produced by the underground mine, and purchasing ore from the nearby Crescent gold mine to utilise the plant to capacity. “In the future, though, when the open pit expansion goes ahead we will have sufficient ore at Granny Smith to fill our plant to capacity with our own ore.”

Did a bit of digging and found that Barrick have already appointed a team to work on the Open Pit Expansion. It will take time, but not sure how long - but it may be around that 2 year period from now - certainly possible.

So, if Barrick did expand the open pits within 2 years, that would mean that the OPA may not be extended, and thus, Barnicoat will need a bucket load of cash to get it up and running again. It can be refurbished to 1.5MTPA - enough to treat Crescents near term forecast production.

So, possible scenario as i see it; Crescent can continue treating for another 19 months at Granny Smith - maybe a touch longer. In the meantime, and by probably June 2012, if there are signs that the OPA won't be extended, Crescent (read Focus), will need to start putting plans into place and gathering capital to fix Barnicoat else the ore will not have a home. Are we talking around $80M here - speculating?

Just throwing this out there for discussion as if what i have described above occurs, we are potentially only 6-7 months from a major cash search to get Barnicoat ready in time..

Any thoughts on this? Any other alterntives?