RE:"I think custom milling in that area is out. I don't think they can predicate a major mine on custom milling. Perhaps for about the first 30K tons."
Agreed. However, when Exall/Glimmer sold the mine to Apollo Gold, they "wrote off" 400,000 ozs. I speculate that Apollo's 212,000m of core drilling expanded this reserve significantly once MDA's homework and FF Pitcard's recommendations are done.
In a recent announcement $60 mln was the price tag to "take BF to production". Exall used CMD for mining and the Stock Mill (3 year contract) and moved to Macassa after Lakefield and others did some analyses.
Anyway, using Exall's production rate of 1,000 tpd and as at Sep 1, 2007 and a more conservative ore grade of 0.20 oz/ton @ 97.15% recovery we get ~70,000 ozs for 360 days of milling.
Also assuming $650 POG and $250 CPO= $400/oz profit per ounce EBITA=~ $28 mln annualized at Black Fox. Plus once the ORR is announced, it should be easy to convert 38 mln $0.52 warrants could produce $20 mln.
MTMI kicking in $18 mln. Possible to see $52 mln for 2007 (MTMI $18, BF $14 & wts $20), for 2008 = $58 mln ($30 for MTMI, $28 mln for BF). So there is $60 mln possible within 2007 & 2008.
RE:"They have to build their own mill."
Since they've applied for permits in May, they expect to roll over the mill in Jan 1, 2009. I'm speculating that by splitting up the project into 3 distinct phases:
Phase I- U/G to the 280 m mark..Exall's ramp design went to 400m. Contract Mining & Custom Mill 1,000tpd of 0.20 Oz/ton, At 97.14% recovery for 360 days per year... 70k/year.
Phase II.. Open Pit Contract Mine..Custom Mill. Or Hold to Jan 2009 for own mill. Depends on timing; but overburden and waste rock could be used to tailings dam.
a Phase I & II option/combination could see 3,000 tpd to the Stock mill.
Phase III - U/G below 280 m mark via shaft access. Ore to own mill. Also Ore from Phase I & II to custom mill initially and to own mill once ready.
RE:" On the other hand custom milling could lose them 15%"
How prevalent is cheating in custom milling contracts? Exall decided to move to (incremental 37k haul) Macassa after Lakefield and other independent analysis. So must have been a"big deal" to haul the additional 37k to Macassa?
RE:"well they can save money by doin' it themselves..."
Difference is $50 per ounce as per MDA. However, why not mine down to the 280m mark to generate some cash flow?
RE:"but they gotta come up with the money to build a mill."
I suspect that, as detailed above, they can do it without share dilution. Probably someone who agrees with me could be doing some, "share price capping".
Any stories to tell of price manipulation leading up to an Ore Reserve Report? Or Warrant holders working the PPS down? etc?
Cheers
WInzer |
