Thanks for the reference to Rochester - I had a look at it and as a result have much greater doubts about SS1. You state Rochester is profitable, Maybe you have a different definition of profit than I do.
Go and look at the quarterlies which reveals the actual free cash flow and profitability since 2014. Rochester has been operating for years (well over 10 years). All figures below are in US$. (see images below) and has doubled the mill throughput from 16mTpa to 32Mtpa in the last few years. The current mill size is almost the level of Cadia and they are very expensive.
Cashflow was NEGATIVE in 2024 (to date including 4th quarter), 2023, 2021, 2020, 2019, and 2017. Even if you exclude the high cap ex in 2020, 2021, 2022 and 2023 of $724m the cashflow was negative in each year and the profit would have been even more negative after deducting non-cash items and general expenses. The 2024 figures are even negative excluding cap ex in a period of record gold and silver prices. It did have positive cashflow in 2018 and 2016, 2015 and 2014 of $23.1m, $12m, $6.8m, $1.8m - hardly stellar figures which are at a level that would most probably not be profitable after deducting non-cash items and general expenses.
They seem to have spend between $500m and $600m cap ex just to expand the plant (I have tried to exclude ongoing cap ex for production). Based on Rochester, for a green fields project that SS1 has the Cap ex to produce 100k Oz AuEq pa is probably going to be around $US1b (there has been significant inflation) and for 200Ok Oz AuEq probably closer to $US1.5b - that is between $A1.5b and $2.25b. Massive cap ex.
Production AuEq K Oz from 2023 to 2014 as follows, 79, 70, 64, 79, 46, 106, 113, 107 and 94. Not big production with an average of less than 100k Oz pa and in first 3 quarters of 2024 about 55k Oz (ie 73k Oz AuEq annualised).
It seems based on the above analysis silver and gold prices are going to have to be substantially higher for a sustained period for SS1 to have a viable project. Then there is the question about recoveries which based on historic work do not look very good.
In my view there are much better silver projects around than SS1. If its so good why is the MC so low?
SS1 Price at posting:
71.5¢ Sentiment: None Disclosure: Not Held
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