I'll keep it to cited evidence to support my opinion.
See Post #:65372187 which explains the difference between basket value and concentrate value. Repeat. Basket value and Concentrate Value are 2 different things
"1) Head grade Basket value. Or commonly referred to just as basket Value. "This is just an arbitrary method companies use to try an ascertain how "valuable" their basket is it.
i agree that it does not practically relate back to real revenues. As there is no account for the change in the recoveries and it is also isolated from the grade to which the REO exist"
2) In ground value. Typically referred to as in-situ value. This is not too dissimilar to the above, but the difference here is the figures uses the actual PPM values and multiplies them by the 100% value for the element.
3) Concentrate basket. This is the actual value/revenue one could expect to receive for their processed product
The latter is the figure i reference and use to estimate company revenues. This method is as confirmed with several REO developers - MEI included.
Economic viability of the project of itself requires multiple inputs such that the AISC can be determined.
I have used annotation on the image to try and crystallise a point. This may genuinely help others to cut through misdirection and correlate these figures back to what we're discussing and indicate that some here continue to talk to a figure that i don't even usually present in my tables aka 'basket price.'
Figure 1 in red = basket value. (The figure i don't present but have calculated it here to show what it is). you can see in all my previous post/table this figure isn't even displayed. lol.
Figure 2 in blue = in-situ value. What is the total value of all REO in 1T of dirt.
Figure 3 in Black = Concentrate value. What is the actual total revenue you receive for 1kg of your end product. i.e. A 90% Concentrate of mixed REO.
Once you have concentrate value, you only need one other input to calculate annualised revenues. How many tonnes per annum will we process. This is an example of 5mtpa. if moving to tank leaching arrangements i postulate that 4-6mtpa will be where they land. This also seemed to align with what MEI's thought process was. If you don't believe me can go call the company.
So anyways - that's what the 3 figures i'm talking about. 3 years banging a drum about figure 1 whereas i am presenting figure 3 a relevant and actual figure to calculate revenues.
The 181M is the $31 usd/kg you get times 5795T of REO concentrate produced. Simple.
If one prefers that can used the mined/t revenue. It's $181,000,000/5,000,000 = $36
either way you want to skin the cat the revenue is the same. It's just preference whether one wants to view the margin on the product they produce ($31usd/kg - 11.55) = $20usd/kg
or
The margin on the tonne they mine (36.2usd/kg- 13.39) = $20usd/kg... It's the same thing.
Oh and btw those mined/t cash cost were taken from aclara's feasibility study - haven't been able to locate the mined/t cost of serra verde but presume it to be similar.
I have presented my calculations to MEI - I wasn't told that my methods were incorrect.
repeat... concentrate value. not basket value. If anyone questions the workings call the company - i speak with them frequently.
In short, MEI looks very profitable. To increase revenues above this figure there's 3 simply levers.
-Increase the head grade of the feed stock. (aka drill resources to delineate highest grade inputs)
-Improve the recoveries of desirable REO. (aka the met work that will occur to determine most recoverable portions of the resource
-Increase the process rate from 5mtpa. Feasible with more capex but may not be required. Why not 2 x 5mtpa plants in the future?
Lots of lever in the opex space but it's why the drilling is confirmatory and at this stage one including the pro's can already roughly determine viability. So the drilling and the met work is really validation at this stage. Looking forward to the programs.
(20min delay)