pre-concentration

Sorry people but this is getting me excited. If PLV were able to ship pre-concentrated iron ore offshore they have a lot more opportunity to start shipping big tonnages early. In the Intersuisse report PLV's inferred resource was 103Mt @45% Fe.

Initially the expected target of DSO is 2,000,000 tpa @ 62%Fe

If I assume a shipping cost to Asia at $20/t which is a slightly better rate than previously as I am shipping more pre-concentrated material to make up the 2Mt @ 62%Fe once it is concentrated (actually shipping 2.75Mt).

If PLV ship pre-concentrated 45%Fe, I calculate that the additional cost for shipping pre-concentrated material equates to only $7.6/t cost on the final 2Mt of 62%Fe product.

Yes it is $15M per year but PLV can mine the lot without concern. PLV can optimise their mining from day one and access the easier mineable areas (which could save a bundle in pre-stripping costs) as well as targeting the more productive areas.

PLV could then focus on a better 5Mtpa rate improving the economies of scale, which would reduce the costs even further.

I think this comment in the AGM presentation gives PLV a green light to go and start mining economically, rather than chase DSO at the lower rate to gain a cash flow.

I would love to see the PFS model on this scenario as my numbers have gone ballistic...now where's the kids piggybanks...