I have very little time now, but extremely briefly I would see reservations as :
ISL mines are almost impossible to gain Proved Category in terms of JORC - to qualify for loans, I understand that banks etc require ore reserves to be in Proved category.
ISL resource estimates for JORC usually only gain a classification as Inferred Resources. Measurement of ISL resource without actually mining it requires complex test procedures, extensive documentation, together with estimates and confidence in documentation from a 'Competent Person' (Dr Bob Johnson has gained this category).
The nearby Honeymoon mine has suffered setbacks on its path to finally gaining the green light to begin. The Beverly Mine (also in the same region) has been operational for a while but made mistakes along the way.
The only sure way to prove up an ISL mine is to jump straight to a trial mine. For an independent, such as Bob Johnson, this is a huge step (and fortunately he has the finance for the trial). I guess that success will mean having the Oban trial mine proving, first up, a 60 or 70 % recovery rate.
Do you believe that he's done all his research (this is his first effort - surely has researched in triplicate) to avoid Honeymoon and Beverly mistakes ?
Obviously from all the holes that have been drilled, the stuff is down there. But even with correct, mistake free procedure from CUY, will the geology of Oban cooperate to give a good recovery rate straight off the bat ? This needs a lot of faith in Bob Johnson and his team. It'll fly if successful but any mistakes and delays.....I've almost talked my way out of this now - feeling nervous !
Cheers, Furii
CUY Price at posting:
45.5¢ Sentiment: Buy Disclosure: Held
