S2R 4.17% 11.5¢ s2 resources ltd

Did Kirkland (Now Agnico) apply for Block 4 in the recent...

  1. 10,075 Posts.
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    Did Kirkland (Now Agnico) apply for Block 4 in the recent competitive tender?

    Yes thanks for your question and I'm responding to several here who see Agnico's bid for Block 4 and their proposed spend as evidence that S2 got a great deal.
    This is incorrect. The block is far, far more valuable to Agnico than it will be to S2 which is a point they hint at in their bid.
    Given that the block has been thoroughly aeromaged, IP Surveyed, Geochemistry surveyed and Swiss cheesed with RC and DD drilling it is most unlikely there is another high grade large deposit. But the chances of small deposits say 50K to 100K of low to medium grade gold say 5g/t au are reasonably good.
    What will S2 do with small uneconomic deposits? Capex on a mill would be $150m or so.
    But Agnico has a mill and can process both oxide free milling gold and refractory ore.
    Their feed grade is so high they could blend even low grade ore with it and make a good AISC margin.
    So S2 need a big high grade deposit which is probably not there but Agnico can process even small deposits, eg 20K oz Au
    So if S2 are successful they will have to go cap in hand to ask Agnico to process it and they probably won't or will change a high fee for doing so.
    The assumption that Agnico's bid represents value for S2 is wrong, it represents value for Agnico.


 
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