Based on current resources they won't expand production unless they revise their studies now.
For 2 reasons:
1. The feasibility seeks the OPTIMAL approach. If the optimal approach is 50k oz per annum, there is NO reason to expand production, because that expansion would give a detrimental result. Otherwise it would have been the approach selected initially.
2. The production process involves part of the ore being treated at Parkes on a contract basis. To increase production would likely mean those terms would need to be revised (not an easy thing to do).
Production expansion will however obviously come if they find more nearby (not in-mine) resources but that is probably a bit down the track.
The other reason production expansion could come earlier is if there is a significant change in gold price (either way) that affects the feasibility study paramaters.
Note, when I talk about production I am talking about 'at head grade'...there is no reason why the 50k oz per annum won't be substantially exceeded (even for same tonnes mined) simply because the resource is likely to experience a significant overcall (similar to what RMS achieved at Wattle Dam). The company of course is not allowed to state that definitevely however. Personally I believe a production overcall of around 10% is likely.
Cdchi1
CRC Price at posting:
14.0¢ Sentiment: LT Buy Disclosure: Held
