Member Info for Cornishknocker

There are several areas that will lead to major decreases in c1 costs: -
1. Conversion to shaft hoisting - as the mine deepens ramp haulage requires more trucks, operators and fuel - shaft hoisting will massively reduce that.
2. Dms upgrade of mill, allowing larger tonnage to be mined.
3. Construction of mill on site removing the ore transport cost.

Altogether that should bring C1 costs to around $2/lb

What is your understanding of why production costs are high and what are you comparing them with to make tgat assessment?

The situation in Newfoundland is very different to here, since the beginning of December the province has had 50 new cases and I currently at alert level 2, which is akin to where this country was in August. The mining industry has been deemed essential since the end of May and none of the control measures in place will have any impact on productivity.

I think that's pretty fair and reasonable.

Rambler purchased nugget mill as a gold processing plant and added a copper circuit. There were good reasons for this, it was fully permitted relatively new, cheap $3.5 million and it had tailings disposal at hand.

Just did a quick calculation, with the current metal prices and taking into account recovery and bonus elements, we only need a grade of 0.7% to hit the presentation forecasts

I take it you read the assumptions that the presentation is based on at the back if the presentation? And you also realise the NPV calculations are comparatives of investment options, not the steady state scenario?

I'm now thinking the next one will be confirming the purchase of Duck Pond Mill - for those unsure of the plan - Duck Pond Mine was a copper mine opened in 2008, which shut as planned in 2015 (on exhausting reserves). RMM are planning to purchase the processing and backfill plant from Duck Pond and relocate it to the Ming Mine site which will remove the cost of transporting the ore from Ming Mine to Nugget Pond - the dismantling, rebuilding and commissioning process is likely to take 2-3 years and once complete will give ming mine 2400tpd of processing capacity on site at the mine and the ability to start backfilling stopes, which will enable pillar recovery in mined out areas of the mine.

The plan to increase capacity in the short term is to add a DMS screening plant at Ming Mine, which will enable mine production to increase to 2000tpd, with 650 tonnes of waste screened out prior to transport to Nugget Pond Mill.

Heres some help for you Helpme, you haven't gotten a hold of the wrong end of the stick, you've picked up a completely different stick! We own a gold processing plant tgat we don't use, this deal is to sell that plant.

No problem at all, what it doesn't make clear in the presentation is that those are two upgrades to the existing set up. You could ask the question why spend the capital when the mine will make a profit as it stands.

The benefit of those two upgrades is it secures the future of the mine by reducing the production costs going forward, so when the copper prices drops at some point in the future, the mine will be a lower cost producer.

Sorry James, my mistake (I'm reading it on my phone). That ones for the introduction of ore sorting, which would allow the mining rate to increase to 2000tpd

Hi James, the cash flow analysis there is for the duck pond mill project, which will increase production to 2500tpd, not for steady state production as we are. The biggest thing there is the companies assumption is for Copper at $6400 a tonne, where it is currently $7800 a tonne.

Hi James, if you look at the RNS of the 13th November, there is an outline of capital plans, which amounts to $10 million. Remember this a producing mine not a development project, so this is money spent in opening up new production areas, particularly in the areas where high grade ore was found 12 months ago.

I'll give you that one!

No problem, I probably should have been clearer.

1500 Metric Tonnes Per Day - No typo, its important to differentiate between Metric Tonnes and Imperial Tons when looking at projects in North America.

Thank you, yes there is an ale called cornish knocker (skinners), I've had the nickname longer than that. My nan used to have a lodger tgat used to work down South Crofty and he used to have a cornish knocker on a chain - The knockers are the the legendary underground pixies, that would keep you safe if you threw the the crust of your pasty. So when I started at the Camborne School of Mines nearly 25 years ago by nan bought me a tin Cornish Knocker on a chain and then the nickname took on at CSM.

I left exploration out as its hard to predict - if you spend £1 million and find nothing you lose a Million, but if you find £100 million of additional resource, you massively increase the balance sheet. With regards to ramping up,I would be surprised if they are not operating at close to 1350TPD at the moment, its not an operation that requires people working in close proximity to each other. Once the DMS comes back on stream(again this should be quick) you can increase production to 1500TPD very quickly. DMS gives you a very quick cheap preconcetration, which should reduce reagent usage in the flotation section as well.

The biggest item not factored in is exchange rates. The mines production costs (Real, not reported) are in CAD$, the commodities are priced in US$ and holding company profits/losses are in sterling.

OK, so the mine are Targeting 1500MTPD @2.0% Copper, the mill is operating at about 93% recovery.

So that's 1500 x 0.02 x 0.93 which is 27.9 tonnes of copper metal in concentrate a day. Multiply that by 365, gives 10,184 tonnes of copper in concentrate a year. On top of that the mine produces roughly the same number of ozs of gold as it produces tonnes of copper.

At todays prices 10184 tonnes of cu @ $7800 = approximately $79.5 million dollars and 10184 oz of gold @ $1850 = $18.8 million, so with silver call it a gross revenue of $100 million. Take 5% off for smelter charges, royalties and transport that leaves $95 million. Production costs are between $35 and $40 million, so with admin expenses call it a net profit if $50 million (thats US) a year, so about £45 million. So £300 - £400 million valuation gives a price to earnings ratio of around 7, which is actually quite low - and thats without factoring in other opportunities. To get to that level requires the mine proving it can hit hits production targets and the prices staying at current levels for FY 2021, then by the time the 2021 results are announced it should be at 3-4p