Just caught up with this. I think pygmyhippo takes a rationale...

Just caught up with this.

I think pygmyhippo takes a rationale approach to CAP but a few points are askew.

The issue of grade is a constant source of confusion for Hawsons. All the talk of supergarde and alike does not make it easy to understand.

The product or concentrate Fe grade and the in-situ resource grade (DTR) are two completely separate matters.

The product or concentrate grade only matter in terms of the price that can be obtained for selling it. The likley product or concentrate sale price is unclear for all sorts of reasons and much rhetoric surrounds it.

The in-situ resource grade is far clearer - its 14.7% DTR. It means you have mine and process at least 6.8 tonnes of material to produce one tonne of the product.

I think the best and easiest way for many, especially non-experts, to think of it is to convert the Hawsons Resource to Au grade equivalent. I'll stick to USD.

If Hawsons product is sold for $100 per tonne then the in-situ (in ground) resource value is $14.7 per tonne (125 * 0.147). Au at $1580/ oz is worth $50.8 a gram.

So that means Hawsons mineral resource has a Au equivalent grade of 0.29 g/t. You can use different prices if desired and work the number accordingly, this is an approximate exercise.

Point is the Hawsons mineral resource grade will rough out around 0.3 g/t Au grade equivalent in a wide range o scenarios.

The usefulness of the Au grade is that it converts the headline resource grade for Hawsons to something far more familiar to mining investors. They can then compare and contrast to well known deposits or undeveloped resources this way. Cu equivalent grade is very useful to and its often mined from iron ore sized pits. Using the conditions above and a $5570/t Cu price the Hawsons grade is 0.26% Cu equivalent .

A 0.3 g/t Au or 0.26% Cu equivalent grade highlights the extreme challenge for CAP in developing the Hawsons Resource. It is a very low grade in-situ resource and there are few if any Cu or Au mines currently operating in the world at the equivalent grades that Hawsons has.

This way of looking at it cuts through the rhetoric.

Thinking of it like this probably explains why the CAP chart is a train wreck and the SP has not exceeded 20 cents since mid 2013. Its also worth noting that in 2013 CAP was a multi-commodity explorer with other projects, it had not yet committed 100% to Hawsons only which was around 2014.

CAP management have proved they can process mineralised material and produce a quality product at Hawsons but they have not really proved they can do it all at a cost that consistently and reliably makes money, that its robustly economic. With a + 1 billion CAPEX price tag, robust economic potential is critical.

In the end the only sure way to asses the costs is by a trial mining pit and processing plant but a clear strategy to do this to a definitive timetable, and the money to do it, are yet to be forthcoming.

Th total product production costs that matter most.