product being shipped, page-7

Okay, very quick thoughts on this (anyone feel free to jump in and correct as required).

Overall, slightly disappointing but unlikely a significant material impact, based upon:

- 10% reduction in Probable Reserves and slighly higher production costs (lower grades across more tonnes, so more ore to move to achieve the same result).
- Seven year mine life confirmed at current probable reserves; they don't mention whether this has affected the forecast production figures over life of mine (400,000t of zinc and lead-copper concentrates) - I've not been able to find the old reserve figures and grades so if someone could elaborate on this point...
- Viable mine plan at current metal prices (you would think/hope that yesterday's statement in the announcement regarding shipments that the lead-copper concentrate will cover operating costs is based upon these revised figures.
- Possibility of extensions to north and south; possible increase in reserves/life of mine longer term?

So, net effect seems to be slightly higher operating costs, along with a possible reduction in total output. Not great, but not the end of the world, especially as this can be mitigated, to a degree, by further reserve identification (although spare plant capacity would also help in this instance - anyone have any idea of estimated utilisation rates or costs of increasing throughput?)

The thing is, it still meets corporate objectives (one of these will likely to be to make a net profit for the operation), and at the end of the day, it's not the main game in town, that's Algeria - this is a nice little sideshow along with some welcome cash to move things along.

What we need next is an updated JORC, along with new costs on the pre-FEED, which they've stated they believe has the potential to drop significantly upon re-design.

So, maybe a little short term pain early tomorrow (if not already in), but longer term should be fine, IMO.