Hello Ritchie, I was tempted to average down too until I did the...

Hello Ritchie, I was tempted to average down too until I did the maths.

At current metal price, the deposit appears marginal as seen below:

Taking current metal price, exchange rates and recoveries of 90% for each of Ag and Au, and 80% for each of Pb and Zn gives an inground value of around A$1,100 million.

Assuming stripping ratio's of 6 to 1, mining costs of $1.5$ a tonne for ore and $0.8 a tonne for waste; metallurgical costs of $33 a tonne, smelting costs of $5 a tonne and other costs (freight, management, environemnt, mine closure) of $10 a tonne gived total operating costs of $920 million. Leaving a surplus of $180 million.

The above figures do not include capex, estimated at between 200 and 250 million and raised by a mixture of debt and equity, taxes, or royalties. These will rapidly deplete the above to surplus to around zero and and equity raising at the current share price could result in massive dilution to shareholders.

From the above I believe that the depsoit will either be developed as a joint venture, sold, or put on ice until metal prices improve.

Disclaimer: I do not know the metallurgy of the deposit or the metallurgical costs and I am not familiar with the operating costs of polymetallic mineral deposits or mining costs in NSW. So the above figures might be completely wrong. I put them together for my own guidance and I recommend everyone else do their own research and come up with their own figures. My conclusions are based on my potentially inaccurate figures and are not investment advice, readers should make their own conclusions based on their own figures.