great analysis @ROKCHICK, I am guessing your a geo from your...

great analysis @ROKCHICK, I am guessing your a geo from your title and I am not so would be interested in your thoughts specifically on the comment upthread by Goldgeo ;

"Geomechanics/geotechnics combined with the geometry of an ore body dictate what kind of pit shell can be developed."

I don't mind Gold geo's comments as they are often contrarian and they help you test your own thinking.

My guess as a non-geologist is that while maybe true wouldn't all that still be subject to the other major constraint here being cut off grade ?, because that's the grade or breakeven point below which your losing money by moving that "block of rock", so I cant see how that can't be an overriding constraint in any any pit design / optimisation process ? If its not a short run constraint in the mining plan, surely it must be in the complete life of mine plan around pit boundaries ?

Cut off grade I thought was that level of grade that is necessary to ensure the value driven by processing the mineral resource obtained from any given "block" relative to the estimated value of your costs to cut and process that "block" , but importantly allowing for reasonable risk tolerances ( ie a margin of error) . There is an inherent trade off in selection of a cut off grade, between maximizing your resource/reserves and minimizing your cost of production and your tolerance for risk in the mining plan. When the price of gold was much lower , the cut off grade by necessity had to be much higher to cover costs allowing for risk. Again this is something that will be fleshed out more in some detail I would assume in the Pfs. The beauty of a high gold price, if there is also a low underlying cash cost to mine is that you can take more risk on and go down to lower levels of cut-off grade (which effectively DEG did here by going to 0.3 gram per tonne above 370 M - to me that's a bit of a sign here too they think it will be not expensive to mine) and thereby possibly take more resource than what would otherwise be possible if the Gold price is lower or your cash costs to mine are higher.

I am glad this Argonaut research report was posted up as it provided me some motivation to update my NPV model which had been sitting there for about a year or so un -updated and I always meant to do that once we got to the new MRE for Hemi. I am looking forward to the next few months as we will soon have much better clarity on the economics. That will be good for shareholders as one can make an informed judgement whether the risk/reward ratio from sticking through to production is worth it. I think it will be, but lets see what they come up with in the Pfs.