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Ajmj , you raised some good points about toll milling . Producing by q1 isnt an option though .
Since our pfs puts aisc at around 700 for 80 k oz production personally I dont see how calibre scale can be cheaper considering we have the extra transportation costs .
Would be interesting to hear if any proposed toll deal would be a profit share or price for ore . It was a vid from a long time ago but I seem to remember mc mentioning selling ore to b2 and its up to them what they do with it .
Taking on board the extra possible costs etc .thanks for your input and the likelyhood that the boost may not be as significant as some may think but as you and mc has said it is proof of concept for financing .
Seingred, my calcs were back of the fag packet type and I was just trying to illustrate why I don't like the toll milling option.
re financing & gold pour - what I was suggesting is if the company acquired a 2nd hand 1000tpd processing facility, instead of going down the toll milling route then the time difference between getting full cost of contained gold between the two scenarios is not much (agreed, I had not accounted for any time delay in actually obtaining financing - its a shame that MC has such a long lead for financing).
On the toll milling route, IMO, a profit share is the worse possible options. Most toll milling/processing arrangements (mexico, aus etc) work on a treatment cost per ton. Depending on the ore type, hardness, leach susceptibility etc, this ranges between 30-100$pt of ore treated. Ore at Mestiza is clean, hard but less hard than La India due to partial oxidation, no preg robbing species and amenable to high recoveries in a short leach duration, so if this ore was being treated in mexico/aus, it would be at the lower end of the cost spectrum. So 2-300$/oz. Much better than a 650$/oz profit share. Hence another reason I would not want a toll agreement if it was based on a profit share. It is worth noting that Calibre milling our ore would see their AIC lower due to economies of scale.
My comments would not be applicable if we were to batch mill btw.
Also, don't get me wrong, there is merit in toll milling, as it's essentially large scale trial mining and thus significantly de-risks the project from a technical standpoint. But I do not believe there is sufficient free cashflow generated by toll milling to make a significant dent in the financing of the actual 2.5-4ktpd plant that will eventually be built on our site.
I can’t believe the detailed information some of you guys have on mining, quite amazing and incredibly helpful!
Ajmj , in the proactive piece today nc states pressing the button on finance q1 or q2 next year .cant see how you get to gold pour by then .
Also on toll milling it would seem to me that the costs have to be around $ 700 plus the extra expense of trucking it to calibre .I think it is a bit hopeful that calibre would shoulder the main cost burden .I would imagine any split would be after costs although I do seem to remember a long time ago mc alluding to selling the ore and upmto b2 what they do with it .
It is hard to imagine that mc keeps mentioning a tollmdeal if there is no ongoing dialogue .
Could be a busy day tomorrow if all the detectives compare their notes and loading up our own trucks with a little extra Condor ore and maybe see the latter half of the 50s before stepping into the 60s, although a bit before my time.
Glad we agree on the costs ex-site.
Also, to add a few key points I think need to be considered. Trucking 2kt per day seems unrealistic for a couple reasons: Assuming 30t trucks at 75% capacity, 2ktpd would need 89 loads which given its an 6 hour round trip would mean you'd need a fleet of around 20 trucks assuming 24hr driving & loading which I'd be surprised if this is achievable. So you'd be looking at 40 trucks. Since it's unlikely the townfolk would be happy about trucks roaring past 24hr/d its unlikely to be feasible to have this size fleet and this frequency. So realistically, only 500-700tpd could be toll processed. Whilst the margin would still be nice, it seems unlikely the economics are grand enough to warrant this option. At 500tpd, it would be around 80oz pd so after costs, profit share, cash for Cnr is around 70k$pd, then there are tax and royalties, leaving us with around 45k$pd. Realistically prestrip + site prep + primary crusher is going to cost at least 5$m so would take 6 months to pay down. Add the 4-6months of prep work before first toll ore is trucked.
IMO, far better to opt for the second hand mill, take 6 month to construct, pre-strip whilst construction is going on. first gold pour q1 maybe q2 2021, no trucking or toll treating cost. free cashflows to CNR commence roughly at the same time as toll option.
Reposted to this thread.
Folks remember you still have to remove a lot of overburden to get to the gold but then you don't have to buy and build the mill and associated infrastructure. I calculate the cost of shipping ore to Calibre to be about $300/oz AISC leaving CNR and Calibre to split $1700 for each of the 90,000 Mestiza ounces (£115m). A 50:50 split would net CNR our market cap in cash over 2 years.
Worth noting in mind trucking the ore the 277km. Calibre reckon they can do this from El Limon (c.260km) at 25$/t. Say 30$/t in our case to be conservative. avg diluted grade of ore in trucks c. 5g/t so per oz we're looking at around 180-200$/oz. Also, it's been not mentioned yet, but the ROM ore will have to be crushed prior to trucking to La Libertad to homogenise the ore (otherwise ore grade reconciliation differences between what we say and what calibre say will cause issues). This means double handling of ore plus cost to crust. I estimate based on similar ops else where this will be between 10-15$/t. Thus all in all, we'd be looking at a cost of crushing & trucking 250-350$/oz. This is before profit share/toll treating costs. IMO, toll milling is not as attractive as it initially looks.
Let's not forget that the $700 includes the whole process of getting the rock out of the ground and milling costs , if we enter into a toll agreement these cost are within the split with Calibre. All we need to do is strip a bit of top soil and load a wagon up with ore and that's it, not really a £700 dollar process I think.