I am on the edge of my seat ... waiting for this Reserve statement... may need to wait a little longer for that. However it was the November RNS I believe that promised a road update this quarter, so I still hope to see that before Friday. Best, M
Cossy going back over the IG interviews since December 21st, I do find a few occasions where he says the resource statement is out in Q1 (Released 10 Feb), and says that the Reserve statement follows on from that - but not that the Reserve Statement itself is promised in Q1. Think theres been some confusion here. It's coming, no idea how long it takes RPM to sort out the reserve statement, and given inputs will have been from the Reserve statement on 10 Feb, they've already had a month and a half. Maybe that's not enough time. Regardless, it was the Resource Statement that was to be released in Q1 and has, Reserves were never suggested to be released Q1. Would be nice, but with three days to go, unlikely.
There are a number of factors to work out the OPEX and none of them can be inferred from COG.
OPEX is the amalgamation of so many factors and with AMC you have to take into account the two types of OPEX. There is UG mining and Open pit. We previously had a figure given via the operational blueprint. But this will be well out of date now.
Just on OPEX for open pit you have, and this is not exhaustive, starting at the top of he process, explosives, machinery for excavation, trucks - lots of them, fuel, processing materials, power (a decent dragline takes an 11kv feed for example) across the mine, resources, living arrangements, food and ablutions, comminution, control, operational control and maintenance - proactive and reactive, smelting, transport on and off site, water, environmental controls, mine management ( you could lump with resource I suppose).
For UG exactly the same but it's room and pillar, so different machines, different operations, different manpower, also there is no legacy cost of OPEX by the company on this so all of The abOve and the UG should be costed in the DFS, this is a lengthy process. Also you have to factor in exchange rates and general macroeconomic inflation rates (up and down).
It's a bit of a full on task, there is also the fact that the mine plan may come up with alternatives on UG and open pit which affect the operational scenarios and hence OPEX downstream. E.g. It may be cost effective during the early years (during the loan repayment period) to do both methods of mining if the grades stack up or if a bit of blending is required. Iron ore miners such as Rio and BHP blend their ores at ports and or other central points so that the client gets the right mix. Again operational cost.
There is also the cost from the smelter to the port / railhead for onward transportation and as we know the mine is a long way from anywhere. But it's all relative. You can guess that he COG is going to pay for the OPEX and give a decent profit but this also has to factor in that you may (if the nickel price is subdued) have to sacrifice the more precious high grade to pay off the loans whilst still achieving some form of profit margin, this also affects the mine plan longer term on what and how you are going to get the ore out of the ground.
However, you can bet the preliminary estimates and the operational blueprint have helped set the CzoG and that they know that is where the lines are drawn to fulfil operational success and profit. V
Given that in the latest resource update RY went for .4% cut off grade. In the 30 Sep 2016 "Mining Update" RNS, the tables presented for the holes drilled showed COGs for .2% and .5%. It would seem that settling on .4% is the real deal then, and perhaps if, and I hope RedLee can critique my simplistic approach here, perhaps we can estimate where the Opex figures are.
If we assume opex per tonne of $40, and we have a Ni price of $4.50/lb, then:
Pounds per tonne: 40/4.5 = 8.88 lbs per tonne then COG percentage 8.88/22 = .40
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