No need for peer comps regards "sufficient confidence for economic viability"... just the test work to demonstrate what grade ore has what net smelter return (NSR). Confident economic viability requires two inputs then; confidence in the capex and opex, and confidence in the grade and location of the ore. ARR is on record saying they have good confidence in the operating costs now, but I can't see higher grades in single holes, surrounded by lower grades, can be anything other than a lower grade average type ore feed for a scoping study...
"What NdPr price do you estimate they used in determining a 1000 ppm TREO cut off grade?".. that is of course the easiest and most sensitive variable to tweak when goal seeking an 'economically robust study'. Serious, low-cost deposits should use low prices to demonstrate confidence in conservative reality as opposed to unrealistically high prices to make the NPV headline number sing. After the MRE Measured and Indicated pivot, the jury is out on how serious/conservative/confident ARR really are...
Let's consider that 1000ppm TREO cut for a minute. Net Smelter Return costs for cut-offs are usually calculated form the pit onwards. That is, don;t included mining costs because the question is whether a tonne in the pit is trucked to the plant or the waste dump. If all the costs of processing into a con, leaching, G&A etc are more than the recoverable REO value at the 'assumed REO price level'.... then it is below cut-off and to the waste dump.
1000ppm ore feed per tonne, mult by 85% recovery to leach con feed, mult by 85% recovery to leach liquor, mult 95% recovery to Refined REO products = 686ppm TREO to final product. ARR has nice DyTb credits, I calc that final REO products are worth the equivalent of 30% NdPr in the TREO. 30% of 686ppm is 206ppm NdPr equivalent product per tonne ore at 1000ppm TREO. 206ppm x US$100/kg NdPr-Ox = US$20.60 per tonne ore opex from mine to sold product. Obviously that opex per tonne goes up or down with the NdPr price assumption, keeping in mind NdPr-Ox is currently $55/kgbut some projects are using >$200/kg long term...
Assume they aim for a 3.5Mtpa operation, 3.5M x 20.6 = US$72M opex, plus say $13M mining costs for US$85M cash cost to produce XXX tonnes of REO and NdPr equiv??? That is the ultimate metric to compare Halleck Ck with global peers and competitors. That's why it's so important what the head grade vs leach feed con grade is, because that variable has huge leverage on the ultimate operating costs.
If they can mine 5,500ppm ore feed for a good few years with minor strip, 3.5Mtpa plant could produce 13,200t TREO final product, or 3000t NdPr-Ox final product plus DyTb credits, or 4000t NdPr-Ox equiv final product. That is s significant mine on the global scale, with easily expanded upside should the demand and downstream capacity emerge. That's a cash-cost about US$5/kg NdPr equiv, or ~US$16/kg TREO product (subject to all sorts of assumptions yet to be proven) at US$85M annual cash cost. Roughly on par with the best deposits, and more than good enough to put most other pretenders onto a dusty shelf for ever...
GLTAH
Expand
(20min delay)
