Indeed, we are more into analysing sentiments of various shareholders rather than the stock itself
To me any AISC number in the next two years is not worth the calculations.
1) If the company is sitting on 30.000+ tonnes of tailings, which showed a remaing grade of 9.3g/t than this will lead to incredibly low AISC-numbers. Look at BLK where they are happy with 1.5g/t out of an open pit operation resulting in AISC of 912$. This is with australian wages and a stripping ratio of 1.5:1 (waste/ore). Orinoco pays Brasilian wages, tailings are assumed to be 1:1 strip ratio and HM4 will likely be positioned right next to them.
2) The plan is to blend the tailings with the high grade underground feed, whereby the HG-nature of the underground ore kind of evens out the higher production cost. So again at least a very sustainable number. Presumably the 500-600 $ cash cost refer to the underground feed alone, as it stems out of the SKYPE- interview from January?
3) The interview of March 9th outlines there won't be a conservative approach with qualifying resources and reserves. It proposes rather a "belief in whatsoever"-approch.
JG: "We work on the simple motto of “the more we mine the more we will find”."
JG: "Like a number 1 draft pick in the AFL, given his form to date to get picked number 1, he clearly has serious potential (same with Cascavel and all our results to date), but the more he plays well the more his value goes up – 50 games, 100 games, 200 games.
This is exactly the same with Cascavel, the more we mine, the more we prove the ore body keeps going. If we can deliver increased high grade returns on production, we believe investors will be able to better grasp the mines’ true potential based on a combination of drilling intercepts and ongoing mining results."
JG: "It's similar to Norseman in that it can be difficult to JORC this type of narrow vein orebody out past 1-2 years of mining – the cost and expense of drilling out a narrow vein to obtain potential JORC ounces is far inferior in my opinion, to the economic benefits of mining along strike with known grades and a visible orebody.
Effectively we only want to mine and find. I don't want to spend money on headline drilling for the sake of proving up a mine life, when that money could mean multiple returns to shareholders from mining. So what we do is drill for structure as mining progresses and the next campaign starts later this month."
This is something where I can understand Esh's resentments if you apply the standards of a serious investor. It has more the character of gambling rather than investing.
Welcome to Casino: "Faîtes vos jeux!"
To me this is one of the hottest bids in the mining sector but clearly something playing in the highest risk-category. If you are not prepared to loose your money - stay out!
Beware of "Gier frisst Hirn" - "Mammonism eats brian" (hope it translates o.k.)
