burnakura feaso out, page-19

The Burn FS shows cash costs 10% above what I expected but they said these would drop significantly with the heap leach as I expected so I am not too fussed- despite the fact I would have preferred to see cash costs below my estimate. The main reason appears to be because the grade on the starter mine is averaging 3g/t while I thought it might be a higher grade in the early years.
It turns out they have planned the initial mine life on the part of the resource with the highest drilling density rather than only targeting higher grades so I don't change my overall valuation. The grade in the early years is the average grade available for LOM using the higher grade cut-off.
For now I assume they mine at least 70-80% of current resources resulting in 12-14 years at the start up rate or 6-7 years on current resources at the 500,000tpa higher rate. Current resources should grow especially at Gab. So extending mine life.
Cash costs should drop with all 3 stages of expansion- heap leach through naturally lower cash costs, expanded CIL through economies of scale and addition of flotation circuit through copper credits.
This project is much more valuable than the initial findings suggest.