sydneysiderthere's "grade" and "head grade"i think the grades...

sydneysider

there's "grade" and "head grade"

i think the grades are fine - it's the head grades that are low right now.

that's because CTO is "Developing ahead of Production".

During the current development stage the overall ore mix may be say 60% development ore /40% stoped ore right now.

Once the Development is advanced and more and more stopes are producing the overall ore mix might switch around to say 60% stoped /40% development.

The stoped ore percentage rising from the current 40% to 60% later on represents a 50% rise in head grades - a very significant shift.

There will always be a level of dilution - it's just that it's excessive in this early development stage.

what is remarkable is that given the current level of dilution and low production rate the costs are under Aus $500/oz (US$350/oz).

so the costs should come down significantly with an increased production rate (scale) and a 50% rise in head grades.

i think cost estimates of under $350/oz sounds right.

We just need to see production and more stopes... and until we do it's just theory and idle talk.