Oops. My bad there. I initially crafted on my response on your original comment about mentioning a couple of months ago that they should bite the bullet - when the NP was still well below the DFS. But somehow I promptly forgot about that and started thinking you were advocating from last Sept. Sorry about that.
Personally, I think it's very close now. I think they'll still give the market some time to confirm. And with no apparent replacement CEO announced (yet), I can't imagine that it will happen within the next 1-2 months, anyway. (I'm doing a rotten job at ramping...).
I find the tone of your question about continuing to manage the TD somewhat inflammatory, but I'll put it down to drafting. I have always said, it's my view that management should wait until the market economics make the project viable and hitting the DFS NP hurdle is a key element of that. It's not ideal that last year's NP uptrend, which was the basis for the CR, broke down, but what can you do. They cannot control the market. So they do the least worst thing and park the money until things improve. Far from optimal, and something I hate seeing, but the least worst option. Attempting to force the market into our own timing is a recipe for disaster, imo. I'm repeating myself. Besides, what's 1-2-3 months from here in the larger scheme?
To answer your question about what happens if the NP drops part-way through the refurbishment period: I thought I dealt with that fairly comprehensively earlier. If they commit after the NP is at or above the DFS NP, they can choose to partially hedge at DFS-friendly NPs to manage some of that interim risk whilst they are in no-man's-land (so to speak). Alternatively, they may choose to take the business risk and commit unhedged.
I think what is getting missed here is that, if one takes the trouble to conduct a DFS and a mine plan, as one should, then the last thing you should do is ignore it wrt the timing of when to start. Adhering to the "go/no-go" metrics of the DFS is an embedded discipline. If the Board pushed the button on restart after the DFS NP has been suitably attained and then made a strategic decision to proceed unhedged, then they would quite rightly be able to point to the fact that they adhered to the DFS from a decision-making standpoint if the the NP became problematic part-way through the restart process. However, if the Board chose to go early (i.e. below hitting the DSF hurdles) and shit happened, then they'd have some difficult questions to answer about how they justified ignoring their own DFS document, without compelling reasoning. My point here is we cannot simply say let's crack on simply because we are sick of waiting. That's not how it works for multi-million dollar projects.
The DFS revenue of US$7.70 at 0.76 Fx is the equivalent of US$6.84 at tonight's 0.675 Fx rate. That's why I expressed in constant AUD terms of AU$10.13/lb. Then and now (using the diff NPs in conjunction with the diff Fx rates at each point in time) both give rise to the same AUD DFS hurdle (i.e. no indication of higher profit targets - just the interaction of changing US$NP and Fx rates).
I was a bit disappointed that the SS JORC update didn't show any uplift of Resources into Reserves, but I was probably getting ahead of myself. The Resources picture is certainly now better than is was previously and will provide the basis for ongoing proving-up during production to increase the LOM from the SS side of things. Hopefully we'll see a similar outcome wrt the BS RC drilling that just started. We'll need both for an overall LOM increase for the entire BS project.
No need to apologize. You didn't hit a nerve as such. But when I saw my name used so close to your original comments about seeking planets aligning and desired sweets spots, I thought a clarification might be in order.
Cheers, Z
POS Price at posting:
4.1¢ Sentiment: Buy Disclosure: Held
(20min delay)