Hey RidersonthestormI heard of FNT from Georisk about 12 months...

Hey Ridersonthestorm

I heard of FNT from Georisk about 12 months ago.

Had another quick look but their grades are average for deep intercepts but not incredible like IndoChines.

200-350metre intercepts but the grade is only 0.22-0.37grams per tonne of gold.

This is what a normal gold exploration project would find these days since most of the massive high grade gold deposits were mined out when the price of gold was only $300-400/oz.

When you compare FNT's drilling to IDC's at 99metres at 3.2grams per tonne of gold on top of the shallow Bonanza Gold Grades below.

The issue FNT faces is that the high temperature low grade sulphides makes for a large scale gold mine, which is what you want, but since the deep intercepts they are finding are low-average grade they will have to move millions of tonnes of dirt to extract a reasonable amount of gold.

This means that the Capex will be substantial and payback slower since their cash costs will be around the $500-700/oz with those sorts of grades in PNG.

What they don't have is a low temperature shallow blanket of bonanza gold grades that we have at Mt Kare, with more, it seems on the Southern End of the Mountain after that last hit we got last month!

You need the combination that we have at Mt Kare.

Shallow bonanza grades of gold that we have, not to mention the 20+million ounces of silver, coupled with the deep high grade gold and silver intercepts to make a business case for a large scale mine.

The shallow bonanza gold can be extracted, mined and processed using much less tonnage of dirt, requiring a much smaller capex, coupled with a significant profit margin to ensure a fast <12 month payback on Capex.

Have a look at our intercepts below, grades of gold and silver that are 100-200metres deep that are 10-30 Times Richer than the Grades of Gold at Mt Andrew that FNT has.

And FNT has some of the better grades of gold for long intercepts on the ASX. It is one of the 30 gold explorers I have been using to gauge IndoChine's Mt Kare drill results against for the last 12 months.

Again, nothing comes close to Mt Kare. And we havent seen the real 300grams per tonne of gold for 31metres or 444 grams per tonne of gold for 21metres that Buffalo/Madison Minerals released in their PFS in 2007!

Im not having a go at the FNT projects in PNG, it will become a very successful gold mining operation, especially with the gold price expected to break new record highs in the next 3 months, but if you look at the stats Mt Kare wins out in both the bonanza shallow gold/silver grades and the deeper high grade intercepts, that's why we have BlackRock/BakerSteel/Och Ziff/Genisis Capital as our major investors.

David Meade/John Shaw and George Niumataiwalu know that the Mt Kare deposit was created at the same time as Porgera, hence Mt Kare's nickname of Porgera's little sister. Porgera goes down 1km, and Mt Kare sits 500metres vertically higher than Porgera. So you can see the incredible potential we have with Mt Kare.

Below are some of the Bonanza Gold and Silver Grades released by Buffalo and Madison that Mr Promnitz has quoted in his update in July. Will History Repeat at Mt Kare?

The other thing to note is a comment made by Mr Promnitz in his interview with the Mining Journal. He states that he expects Mt Kare's Cash Costs in its initial 7 years, where the shallow bonanza gold and silver will be mined wont exceed Porgera's cash cost when they first began operating the mine back in 1988.

Now I did a little digging on the price of gold at the time and it hovered between $350-420/oz in the first 5 years of Porgera's operations. See CHart Below. Since the price of gold was so low back then the cash/operating costs of Porgera would had to have been between $100-250/oz.

If he believes Mt Kare's cash costs will be at that low level then you can expect some cracking PFS numbers to come out since the price of gold is at $1690/oz and heading North!

I hope that helps!

Cheers Nectar