New Hartley's report out today. Also confirms that the POX treatment was not new news to those that were listening. Total capex of A$700m according to Hartley's, other brokers have it pegged at ~$500m. Conservative reserve assumptions has valuation pegged at 73cps (at spot) and using a conservative 14% discount rate. Hartley's assume a 300kozpa production profile, so they are certainly expecting upside from the existing exploration/resource.
On POX processing:
"Encouragingly a large proportion (>90%) of the gold reports in less than 10% of the mass. This indicates that the POX portion of the flowsheet would be significantly smaller than the front end of the plant, lowering the overall capital expenditure when compared to flowsheets which require whole ore POX processing. As the scale of the project increases the additional capex risk as portion of the total capex would be diminish. Further metallurgy results are expected to be announced later in the SepQ and we note that the Company is also looking to assess other processing methods (potentially BIOX® and Albion Process™)."
"We previously assumed that the mineralisation at Brolga would be refractory requiring flotation/POX processing. This assumption was factored into our valuation and price target. "
"Given that POX processing is required, we assume the capex will be in the order of ~A$700m."
On reserve assumptions, not resource. Looks like they may have some catching up to do on Aquila:
"We have taken the latest drill results into account and have updated our mining inventory assumption. We now see the potential for the greater Hemi prospects to contain a total endowment of +1.5Moz at ~1.5g/t Au (previously +1Moz at ~1.5g/t), our numbers now include the Aquila zone containing +0.5Moz at ~2.0g/t".
"Extensional drilling at Aquila looks encouraging, with high grade intercepts yet to be followed up along strike. Given that DEG is still delineating mineralisation at Hemi, we expected the Company to announce a maiden (Inferred) resource within 12-months covering the Hemi prospects."
On valuation (using 14% discount rate, and based on 1.5Moz reserve):
"We move to an Accumulate recommendation from Neutral"
"Our preliminary NAV14is up 5cps to 37cps (spot 73cps) based on a ~1.5Moz at ~1.5g/t mining inventorywithin Hemi."
New Hartley's report
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| Last updated 15.59pm 03/05/2024 ? | |||||
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