[b] opex costs not changing over time [/b] This is a good thing if you intend holding through commissioning to production and there after. For those with shorter term views all they see is higher costs up front.
[b]increasing inferred to indicated for DFS[/b] I think the brokers on the line wanted to hear about new drilling and not infill with minor resource ppm improvements. The infill wont tell us anything we dont already know per-se, it will just be refining the detail. With the hyena drilling I suspect a lot of people wanted them to find out how much of the new high grade material was near the surface vs anomaly A/etango.
A PPM improvement though might help us lower the OPEX so from that perspective it is quite understandable.
[b]'presents an opportunity to consider marketing concentrate perhaps alongside or instead of U oxide[/b] I dont know enough about this to have much idea on its value. I would speculate that perhaps it might allow them to reduce up-front capex by a substantial amount and farm off some of the post-processing. It could also get them into "production" quicker. I cant see too many other reasons to do this.
[b]'increase the margins as we go forward'[/b] This was an interesting part of the call. It sounded to me like there were A LOT of options for possibly reducing costs in a variety of fashions. TBH I would have liked to see more of this included in the PFS, and reflected in the costs, but I suppose you cant do everything instantly.
Again it drives home the point that the opex numbers we have are conservative, and might have the potential to drop significantly.
[b]State of the pfs[/b] Agree re- alot of things being uncertain still. Its almost as if there are so many options out there that they simply havent had time to drill through them all to select the most efficient yet.
Again given where we are today (as opposed to friday) this means that there will be upside as things become more certain
[b]Mining license[/b] Was quite surprised to see this still might go in by end of year. I am not too familiar with the turn around time on approvals, but their relationship with the govt/community is comforting.
Application for and receipt of the mining license will be major milestones IMO.
[b]Financing[/b] Another area with lots of options. I would like to see a lot of work done in this area ASAP as having some kind of financing lined up will eliminate the question - "can we build a mine?".
[b]Duncan McKeen (Macquarie)[/b] I dont think he wanted to hear the improvement of inferred to indicated. Sounded to me like he was looking for more hyena drilling.
The infrastructure overview all sounded good and moving ahead inline with our schedules.
[b]Paul Adams Q to LJ re opex [/b] Lowering the cut off would make sense IMO once they bolster their prospects in other areas - this way there is similar tonnage with lower opex. It might also help to appease those who think only of spot price.
The recent strikes in new areas to me really will enable this sort of strategy because we can still have a 16yr mine life but at a much higher grade if we so choose.
I suspect the focus on cost reduction may have come out of the market reaction - due to the meeting occurring after the SP tanking, its hard to say if this was a plan or a reaction.
If we can get towards the mid-high end of the cost savings they referred to we will be golden.
[b]CAPEX and OPEX breakdown[/b] I found it interesting they included site infrastructure in the opex - sounded like Pat did as well. Maybe misinterpreting but to me site infra is either CAPEX or should have fallen into the other two costs. Maybe just their way of itemisation.
Owner v contract - I thought there was a slight improvement of cost & control in owner but the downside of ability to immediately scale (i.e. more ramp up). Might be some milage in a hybrid when they look into it in more detail.
Interesting that they had included all the backups in cost - sounded like none of the analysts expected that.
BMN Price at posting:
67.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)