The project was undertaken with higher revenue and lower capital cost projections. All my analysis is done using today's numbers. I have also always used RYO's projections re: cost of production and oz.'s of production. Personally I don't think they will achieve either of those which makes the scenario worse. As far as the non-cash costs you have to realize that depreciation, has to be factored in because there is no terminal value in the asset, as opposed to a bond, where the principal is paid back. Reclamation will be a cost in the future also.
Today there are of projects with potential that would make you drool, that are not on a fast track, because of present market conditions. They have revenue projections that are similar in size to Kemess, but have capital requirements, that are 1/5th the amount, and required mill capacity of 1/10th the size. The metal grades of these projects make me wonder why the Kemess project was ever started.
As I have said before, $400 gold might allow the co. to survive, but it won't do anything for the stock price.
Sincerely,
Al Cern |
