Yes samfisher initial feasibility study was based around an INITIAL five year project - review ASX reports, TTR website and Patersons Report for this information.
On one hand, what TTR are about now is solidifying this initial feasibility study with a more bankable resource data - an "infill" drilling program that defines with greater statistical confidence levels the resource (inferred to indicated - JORC standards). This is primarily around Kundip. Optimal debt funding (avoiding borrowing against gold production - hedging) is very dependent upon the robustness of the projects resource. The Kundip drilling program is due to commence in four to six weeks.
The initial feasibility study involved Kundip with a number of open pits and 2 underground mines plus an initial shallow open pit at Trilogy - lasting FIVE years. This is the tip of the iceberg at Phillips River.
On the otherhand, we have the future deeper polymetalic deposits at Trilogy - easily mined but harder to process and produce saleable premium concentrates. TTR have been working on the production methodolgy over recent months to unlock this value (with some promising results). You can easily predict at least an initial 5 year extension at Phillips River from this work if ultimately successful.
You also have to remember that all drilling to date is relatively shallow in all areas with most deposits "open at depth" so probability of further extensions to mine life.
The Phillips River area have some historic mining areas but a lot of unexplored regions as well. Refer to last weeks quarterly report regarding the encouraging work around Kundip. So Phillips River is definitely not a 5 year project - it is far more substantial.
Although investors are clearly disappointed that Phillips River has not progressed as quickly as we all would like (for many reasons) be assured that the project is extremely viable and TTRs management are literally leaving no stone unturned to progress it in the most effective way to create share holder value.
It may infact be a fortuitious delay in some respects at the moment. Timing a project into production can be critical. At the moment labour is scarce in WA and for example nickel miners have been paying big money to secure staff and now with margins plunging we might be seeing a slowdown in wage growth. Also plant construction costs have soared in the last few years. The recent increase in the value of the Aussie dollar has hit margins as well. Things could always get worse I suppose but many experts suggest gold silver copper zinc and lead have a lot more upside to come in this super cycle driven by demand from China, India and many other developing nations. Mining margins have taken a dip in recent times due to lower $A prices and higher costs - might be better in 12 months.
TTR now have plenty of cash on hand (and more to come from Burnakura sale) to effectively take Phillips River forward. It has been a struggle for us long term investors and the latest hit on the price was a kick in the guts (but beyond reason) but we keep faith. I continue to have the highest regards for TTRs management - experienced, ethical and committed.
Yes samfisher - hang in there!
TTR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
