The 2006 DFS was found wanting and Steve set about beefing things up by adding further resource and confidence levels. While that has been done to a large degree and the new 2011 DFS meets some bankability criteria it is not the greatest time for juniors to be out looking for funding. Thank goodness for China's thirst for equity in Australian mining projects.
I guess the way I read it is that Phillips River has still a huge amount of potential at Kundip, Trilogy ( & Queen Sheba) for further discovery at depth and along stike. Kundip is the most exciting for me in that there are multiples of shallow, nice grade, narrow vein (and aluvial) gold deposits and are reasonably concentrated in this relatively confined area. Not Super Pit status but some nice multiple source open pits that alone are not huge in "company making" resource terms but a very simple and profitable mining proposition (particularly at current metal prices) to kelp kick Phillips River off.
It has been expressed many times (over many long years)that there is a question about the origin of these multiple resource "expresions" most recently stated by Jason after the latest alluvial "discovery". Where some of the lines of loads converge at depth is where the most excitement lies. These areas probably will not be drilled until after the Kundip pits are mined and the underground work starts. If the company had a lot of funds then it would be nice to have a deep drilling program in the areas where Harbour View, Kaolin/Hillsbourogh & Gem Restored all converge in the Nth Easter Corner of the Kundip region. Could this be where the deeper "Mother Load" resides. This is all needle in a haystack stuff though and will better attempted after further extensional drilling is completed along the lines of convergence.
I guess there is always the philosophy that you only initially need to discover as much as is needed to get the project up an running and generating positive cash flow, some profit for shareholders and cash for further discovery. Even many well established and well capitalised operations only do enough exploration and definition drilling to cover the next few years of production.
I guess looking for wider discoveries than Kundip, Trilogy and Sheba is now for the future and a line in the sand has to be drawn until after project funding is solidly bedded down. Given that plant construction, commissioning and ramping up projects usually end up chewing up more funds that provided for unless the company can raise a substantial buffer of funds, I would be reluctant to commit too much to wider exploration.
I agree the Company must not be allowed to sell current long term shareholders short by structuring the equity component of the project funding in away that allows a "Johny Come Lately" hugely advantageous terms.
The current management is banking on a boost in share price following completion of off-take and debt funding deals. If these deals being not completed to be completed in a timely manner there is going to be a real need for another placement that will possibly stink!
PRH Price at posting:
2.2¢ Sentiment: LT Buy Disclosure: Held
