Will,
I'm not really following PGD, so I'll have to leave the cash flows to someone else. Perhaps this is a job for James? His arguments would be a lot stronger if he could provide a thorough accounting for both revenue and expenses, including capital costs.
On another topic, how do you see the economics for Shear in the Churchill project? As Vaughn has pointed out, erosion likely removed the original high tonnage pipes, leaving the deeper remnants of hypabyssal dykes. We are talking underground mining here.
Assuming a Kahuna tonnage of:
3.5m (width) x 5500m (length) x 300m (arbitrary depth) = 5.775 million cubic meters.
The specific gravity of kimberlite is approximately 2.25 to 2.5 so total mass is:
5.775 million cubic meters x 2.25 or 2.50 tonnes/cubic meter = 12.99 to 14.44 million tonnes for Kahuna.
Doing the same for Notch:
1.5m (width) x 3000m (length) x 300m (arbitrary depth) =
1.35 million cubic meters.
1.35 million cubic meters x 2.25 or 2.50 tonnes/cubic meter
= 3.04 to 3.38 million tonnes for Notch.
The other two dykes, Jigsaw and PST003, are much smaller, and can be left out at this point.
There are critical assumptions here on depth and uniformity of the deposit, but this does give a very rough idea of what we may be looking at. By combining Kahuna and Notch we get anywhere from:
16.03 to 17.82 million tonnes of kimberlite.
Of course all of this is hypothetical, but assuming a per carat value of $100, this would work out to around:
$1.7 billion dollars usd
At $50/carat this would be cut in half to $850 million.
Will, what kind of CAPEX and operating costs could we be looking at?
Yours truly, B |
