My thought is that the waste contract was decided as being the way to go before the earth moved and was rubber stamped and maybe even accelerated at that time because it was obvious that they had to mine low grade ore from one or two faces rather than having the flexibility of numerous faces which will be the case once the pit is opened up.
Also believe 4 year contract was how long it was calculated to move the waste material to get them to a flexible mining project.
Yes Capital are making good profits but at the same time they will have a 4 year old fleet of equipment when the contract finishes and unless the fleet is sold on or moved to another contract there will be costs involved.
Cowichan lets now move away from the mining aspect and talk about leasing a fleet of 150 ton mining trucks, 200 tonne Shovels etc which you give the impression is simple, so there is the cost of finance over the 4 years plus additional time getting the fleet back to the leasing company premises, the cost of transport too and from the company who has such a fleet in stock and is prepared to take the political risk into account when doing a cross border lease.
Might work in places like Canada, USA and maybe Australia but doubtful over 4 years and will certainly an expensive option.
Cowichan I am not misinterpreting anything I have heard Horgan's response to questions answered about how the tender was handled, accusations of bribes and why Centamin awarded the contract to Capital. He can't say more than he already has. Yes Centamin could do all of the things you say BUT you can't write off the cost of the earth moving fleet over four years and if they did guess who would be complaining that the waste fleet isn't viable.
Sorry if you feel I am foolish guess the new Centamin team are also far more foolish than yourself who obviously knows best.
I have been on many mines where they are owner miners several of those have been Majors and the inefficiencies have been such that after several years of struggling to perform they have turned to contract miners.
Contract Miners have to work to a cost per tonne and therefore believe me they are conscious of every detail and are the most demanding customers that I have ever dealt with.
Majors even junior mining companies have been known to employ Mining Engineers who struggle to understand the fundamentals of moving muck. Don't appreciate the nuances of the equipment and design haul roads and grades that equipment will struggle to climb. I have even seen hoppers designed to take the ore into a crusher that is too small to take the load of the truck that was eventually chosen to handle the ore (cart before the horse). I have had Motor Graders left off the equipment list and when asked why, they hadn't even thought about haul road maintenance, Front Shovel Loaders when the benches had been designed to take Excavators backhoe config. and the list goes on and don't get me talking about the waste dump area being badly managed.
I have also been on mines where they have gone from contract mining to owner mining but in all cases they have partnered with the local equipment dealer to operate a Maintenance and Repair Contract, so you might say still involves a contractor. I am told that one of those mines has actually reverted back to contract miner again because it was difficult to justify a replacement fleet as the life of mine couldn't justify the capital expenditure.
I however bow to your experience and knowledge Cowichan but would suggest "A little bit of knowledge can be dangerous".
Wow what a load of ranting by experts who have never visited a large mine let alone worked in or around a mine.
Was the waste contract justified and why was a contract awarded to Capital or any other contractor and not done in house?
It is always cheaper to owner mine against contractor mining very interesting please can someone explain to me why so many contract miners exist around the world?
Goldgnome I will let you have your say because I can almost feel your need to respond from here.
No surprises, pretty much as expected so next date will be 1st quarter results and this is when we will need to take some deep breaths. Reduced ounces due to plant maintenance hence the split 45:55 and additional impact capex split the reverse at 55:45.
Extraordinary costs will still be applicable due to the continuation of the waste contract.
Extraction continues through maintenance so ROM will be full and plant full on once maintenance is complete so second quarter will hopefully be back on track but as I say first quarter I am sure will hit SP.
Keeping the faith will be difficult when the next set of figure come out.
Tibbs with respect there is no easy water, Sukari had to build a desalination plant and a pipeline to the coast which is a significant distance and expense.
Aton Resources as far as I am aware are still going and are still working at Abu Marawat and a few other areas.
Tibbs,
I have read somewhere on this forum mention of another area being preferred over Sukari but this isn't something that was ever mentioned to me in discussion with the early pioneers of Pharoah Gold and we were talking to them from the late nineties early noughties.
Hopefully if there is truth in the rumour Sami will have had some input into the go for new concession areas albeit if there is no access to significant water resources no idea how it will work.
Cowichan Interesting comment regarding strip ratio suggest you remove the waste removal impact in 22,23 and 24 and the strip ratio definitely reduces. So if average is 8:1 then as I say remove the first 3 years and logic says strip ratio will (should or GOT TO if Horgan wants to stay in a job) reduce.
Excellent news also is the higher grades years 25 through 29 in the open pit (hopefully justifying the waste contract).
Grades lower than 22 for 23 and 24 but increased ore both above and below ground hence forecast of marginal improvement in ounces.
Somnamna interesting but there will be many KPI's before the ultimate "First Gold pour" somewhere on the new concession. The new concession really is what it says new and it will take a considerable time before we see anything other than words such as promising geology, drilling results etc.
My number one KPI would be get the waste contract done and dusted months earlier than original 4 year contract.
Absolute priority is to reduce strip ratio to 6 or below then we will see realistic cost base..
Paul, Open pit mining is cheaper than going underground but yes there will be a cut off point where the cost of mining outstrips profit. This then depends on the mineral being mined and the value of the mineral. So gold provides more depth and where the cut off is depends on the cost of mining. Super pit is like looking into the Grande Canyon. Centamin still has a long way to go.
Tibbs I don't agree Horgan answered the questions asked by Cowichan and these were all contentious questions and he also answered my question relating to the waste contract both as part of the presentation and in the Q&A in far more detail than I was expecting. OK sure there will be questions unanswered due to being censored. What were they we will never know?
Cowichan I suggest you read the 4th Qtr report in particular the link to Doropo you will understand that it isn't just your throw away line "metallurgical fine tuning" albeit not a bad summary there is considerably more involved.
Why not cut and paste the Doropo PEA from 2012 seems to me there needs to be a starting document that can be dissected and developed to put meat on the bone which is what is going on to arrive at a document that is the PFS.
As for it taking longer in West Africa my estimate was 5 years from when geologists start talking positively to actually breaking ground with the equipment to open up the site readying to go mining. Anything earlier tended to come across problems.
I compared the number of years with colleagues around the world such as Australia, Canada, Indonesia and South Africa and a 5 year gestation period was a pretty good rule of thumb.
Yes Doropo has taken longer but I am happy that the work done since 2021 with the new team will I hope overcome "problems" in the future.
Cowichan good luck and a passing comment from me.
Islam reports on exploration drilling programmes and studies not resource.
When the results are provided we see is an executive report or overview of the company thankfully not all of the detail.
Just imagine all of the detail of the mine it would take weeks to read and digest and so easy to confuse, misread.
It is a fine line and I remember having someone demanding to be kept up to date on everything and not having enough time to do my job.
MrBond and Tibbs I love your technical expertise and as you may be aware I do know a bit about what is possible and have seen quite a number of attempts at alternative fuels over the years but none have yet been adopted by the major players.
Generators running on landfill gas is doable and viable if you are in the landfill business but not the sort of gas that you want to transport too far so anything is possible but has to be viable.
At the end of the day the fleets of equipment are built by Caterpillar so this is why I have asked Cholly for his input. We could get a sorry can't provide any detail at the moment because still in R&D stages and guarded secret.
MrBond46 OK sounds good so there must be a very good reason why it isn't standard for the industry but it isn't so I look forward to hearing from Cholly who is a Tech guy working in the industry and I am sure alternative fuels are high on the Cat agenda.
Fuel efficiency and cleaner engines and reduced emissions has been on the agenda for many years but never as important as it is now.
Efficiency becomes a key word not least the then cost impact, does LPG reduce component life is there a better alternative.
Back in 2011 I visited Minexpo and Cat had a Locomotive at the centre of their very large display area and quite often cross fertilisation across industries bring out interesting developments. The reason I mention this is we know that large locomotives are out there under test currently running on hydrogen. So maybe this is something for the future.
Cholly there was a lot of chat on the phone in's about reducing the carbon footprint and also the high cost of diesel. Which relates primarily to the mobile fleets both above and below ground as the power generation plant will I am sure become back up power to the grid in the not too distant future. Having visited Cat's impressive RD facility in Peoria I know Cat will be looking very closely at alternative fuels. Do you have any insight as I know the Centamin guys have mentioned LNG but but not sure that does a great deal for carbon reduction or any significant cost reduction. Obviously electric won't work unless some genius comes up with a modular total battery change at each pit stop that can be done as quickly as a diesel tank refill. Your thoughts please.