AVQ were hoping to ship 1.8% Ni DSO ore but what they have at San Jorge is around 1% Ni ore to ship. No one yet as been able to state where AVQ are going to get this higher grade ore that various people on this forum claim they are going to be able to ship. Looking at the released results most of the intersections are around 1% Ni from San Jorge and that is all AVQ has at the moment. Therefore, that is going to be what they have to ship. Can someone show me where AVQ has access to sufficient tonnes of +1.5% Ni ore to sustain a DSO shipping operation? On 2 March 2016 AVQ released a presentation with suggested cash flow from a DSO operation. This was the last presentation where they released cash flow forecasts. On a DSO operation grading 1.8% Ni and shipping 2mtpa they forecast an EBITDA of US$44M. On a DSO operation grading 1.5% Ni the EBITDA was forecast to be $20M. Therefore, using AVQ's own released figures for each fall of 0.1% Ni in the DSO grade, the EBITDA falls by $8M. Therefore, shipping 1% Ni DSO ore, which is what it looks like San Jorge is going to be, the EBITDA could be around -US$20M. Break even grade would then be around 1.2% Ni. AVQ's own released figures then back up what I have been saying and that is they need +1.5% Ni ore and preferably over 2% Ni in order to make an operation economic. This also does not take into account preproduction CAPEX, which when taken into account pushes up the required break even grade. Have a look at the presentation from March last year slide 18.
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