Dancemonkey2 voose believes it was a mistake to optimise the...

Dancemonkey2 voose believes it was a mistake to optimise the project not NPV....

We need to appreciate their opinion even if it is flawed the conversation is all inclusive. Low grade projects will not cut it in current markets...The supply demand of High NPV projects were out of scale to demand and missed the advantage they once enjoyed...That was a management calculation problem of peers imo not a resource problem which escalated too no funding and transitioned to no free cash margins and oversupply in the market...Projects are trying to manage around this by moving to down stream processing with almost perfect timing....New technology's of Silicon graphite anodes with major global organisations now testing the patent...

To continue

A project needs to adapt to right size concepts and grow into known markets with certainty...Voose comments are flawed because he can not see the value of optimising the project...This same discussion was had with spid81 who argued all this to save $US10 ROM....How wrong could they be...

Updated Reserve DFS 2019
Thru put 22,000 x 12 months = 240,000 thousand tons
Mining ROM per ton unit US$3.14
Processing per ton unit US$27.56
Basket price US$1530
TGC 17.9%
Strip ratio 4.4:1 life of mine
Cut off 10% TGC

Project A 800 tons per day 17.9% TGC

ROM mining cost per ton unit US$3.14+(4.4+1) /17.9% = US$33.30
Processing cost per ton unit US$27.56 / 17.9% = US$154
ROM Ming cost US$33.30 + Processing cost US$154 = US$187.30
800 tons per day x 300 days x 17.9% x 90% recovery = 38,664 tons
Revenue US$59,155,920
Mining and Processing cost (187.30 x 38,664)= US$7,241,767
EBITDA US$51,914,153
Life of mine 24 years EBITDA US$1,245,939,672

Project At 1000 tons per day 17.9% TGC

ROM mining cost per ton unit US$3.14+(4.4+1) /17.9% = US$33.30
Processing cost per ton unit US$27.56 / 17.9% = US$154
ROM Ming cost US$33.30 + Processing cost US$154 = US$187.30
1000 tons per day x 300 days x 17.9% x 90% recovery = 48,330 tons
Revenue US$73,944,900
Mining and Processing cost (187.30 x 48,330)= US$9,052,209
EBITDA US$64,892,691
Life of mine 24 years EBITDA US$1,557,424,584


Break down showing the mining and processing separate....look for variance in ROM mining to mill processing cost...Processing cost is stagnate to grade...ROM mining cost change little at mining level while higher grades of feed material delivered way more concentrate per unit ton...Same Plant same capex....

This only demonstrates the mining and processing cost....It is not inclusive of transport and other cost...which effect revenue and EBITDA to the down side. (DYOR)

Regards Croc