Cattlin 2.5 years mine-life, page-87

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Jehosephat

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24/05/17

18:48

Post #: 24891441
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Originally posted by Bikida ↑

Catching up on some old posts.

A big point to note is that Mine Life is based on JORC Ore Reserve / Mill Throughput.

Also note that Ore Reserve =/= Mineral Resource. To be categorised as Ore Reserve, a much higher degree of certainty of tonnage and grade is required than the lower standard Mineral Resource. This typically means more tighter spaced drilling (amongst a range of other factors including mine design). Tighter drilling means more cost.

Once the nature and tenor of a mineralised deposit has been ascertained, and the operation is running in a nominal and satisfactory manner, there is no reason to run the tight drill pattern out too far into the future. You only need to run it out as far as the current mine plan requires.

As time progresses, and the needs of the mine plan determine that more of the Mineral Resource needs be converted and upgraded to Ore Reserve, then you carry out the drilling, so a new mine plan can be produced.

This means the costs of that drilling is deferred. There is no good business case to be made for an operating mine to spend millions of dollars on drilling now, that won't see a return for many years.

I worked at a gold mine that ran at mine life of 3 months for 9 years, and has been in continuous operation since 1986 until now with many more years left ahead of it. Had all the Life-of-Mine drilling been undertaken in the 80s, its cost would still be accumulating interest now.

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Good clear post Bikida, that should clarify the situation for newcomers.

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0 Great analysis

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