Member Info for goingunderground

Hope the mists have cleared Sleeven

“I also think if we get to hundred tons for a significant sign post”

You did in Q4. (The whole quarter) Do you mean in a month ?

In the absence of a FID it would be interesting reading to see the business plan and forecasts for Regua (if it ever gets going) The existing FID is only for La Parilla and all numbers contained therein exclude any kind of leg up from Regua.

Yes sleeven. IMO 150t is the absolute bare minimum for this to look like a sustainable business, and even at that it is challenged by its ability to pay down capital.

7.93/10 is 79.3%

Troajan. There is not a single mention in that article about Tungsten. There are 2 references to Tin. "acceleraTINg" and "FacilitaTINg"

Thanks for the useful information.

Yugoboss.

Pay particular attention to this section in the FID when trying to reconcile what the actual current opex might be.

2 million tonnes per annum (Mtpa) initial Run of Mine (ROM) rate producing 2,700 tonnes
per annum (tpa) of concentrate increasing to 3.5Mtpa ROM in 2020 targeting production in
excess of 4,000tpa of concentrate at 66% WO3
• Bottom quartile of global tungsten operating cost curve estimated at $94 per metric tonne
unit (mtu) average over the first six years of production

Salient point being the volume of production that fixed costs are averaged out over. An example would be a fixed cost that was averaged out over production rate of 4000tpa would result in a much lower cost per mtu than if it were averaged out over a period when production was at 400tpa. The management costs would be an example. Management salary costs would be the same producing 400tpa as they would be producing 4000tpa.

On loans. The biggest loan from Blackrock can be viewed as interest only, but some of the smaller loans are Term loans they may require repayment of capital too on a regular basis (quarterly, monthly, whatever)

Good luck. It would be far more helpful if the CFO could provide a detailed summary of the current position, although in 3 months or so the Annual report should become available.

Sleeven.
Maybe this will help https://tinyurl.com/hak6b7xb
Hopefully the 3rd line down is highlighted

Thanks Sleeven, it’s a shame some people don’t understand what “operational” means.
Did masterman say metal or concentrate ;-)

That’s great to hear. Always good to be well informed. Good luck

Note I have also included tin revenue as Income and as such overstated the Revenue by $94k (sloppy cut and paste)

The scenario was 100dmt per month W 6100mtu. W@250/mtu
The total revenue, using your scenario would be $94,359 + (6100*$200) $1,220,000 = $1,314,359"
OPEX based on $150mtu is (6100*$150) $915,000
Revenue - Opex = $399,359
Interest per month $550,000

SHORTFALL $150,641 per month. Not enough to pay the interest.

Getinthere now states that the OPEX cost might be higher
"but if we assume that it’s higher than the average at the moment at let’s say $150 per mtu"

Ok, Lets rework the numbers again.
The scenario was 100dmt per month W 6100mtu. W@250/mtu
The total revenue, using your scenario would be $94,359 + (6100*$200) $1,220,000 = $1,314,359"
OPEX based on $150mtu is (6100*$150) $915,000
Revenue - Opex = $399,359
Interest per month $550,000

SHORTFALL $150,641 per month. Not enough to pay the interest.

"but as it does not even cover the interest even at a revenue level before ANY costs are added,"
Yes, that was a mistake. I was looking at 3 months interest where you were looking at a 1 month scenario. I have since corrected the calculation in my post at 12.34
"that is gross revenue. No OPEX. Deduct your $100 per mtu (way to low and includes a tin credit) 6100mtu x $100 OPEX is $610,000
This would leave you with ($1,314,359 - 610,000) = $704, 359.
Interest is $550,000 You are left with $154k."

I'm reaching the conclusion that most on here are challenged in some way. I'm not invested here.

Your scenario was 100dmt per month W 6100mtu
Firstly, I never said anything about $1.3m per month in interest. What I said was "The total revenue, using your scenario would be $94,359 + (6100*$200) $1,220,000 = $1,314,359"

Lok at a different way, because the tin credit seems to confusing people. Especially GIT who quotes $100mtu cost (which includes a tin credit) then he adds on the revenue for the tin. You don't get both GIT, one or the other.

Secondly, that is gross revenue. No OPEX. Deduct your $100 per mtu (way to low and includes a tin credit) 6100mtu x $100 OPEX is $610,000
This would leave you with ($1,314,359 - 610,000) = $704, 359.
Interest is $550,000 You are left with $154k.

Now here is the confusion. 100dmt is what your produced in the whole of Quarter 4. The revenue numbers are as above, as would be the OPEX (the $100mtu is to low) The interest would be (3x $550k) $1,650,000m BUT you only have $154,000 in your pocket. You do not have enough to pay the interest. A cash burn of $1.5m per month minimum, and that was after the best quarter ever !
I'm not including the term loans that exist that would require capital repayments not are we including any repayment of capital to Blackrock.

Its a shame Getinthere has me filtered, but not a surprise that he wants to shield himself from the realities of this.

Yugoboss - "To achieve 10,000 MTU, WRES would have to produce 149.4T of 65% Grade WO3 concentrate grade (%) each month.
Then there is the TIN credit.
Then there is the whole processing / production / management cost to take into account."
You need to also add the cost to service the debt......$500k a month.

But its good to see you are closer to 150t a month if there is ANY chance with the current financing structure.

So, the Masterman fan club had broadly reached the conclusion that anywhere between 90-100t would be breakeven. Now that they understand they were overstating W income by 50% and Sn income by 50%. The answer they now arrive at is 112.5t.... You couldn't make it up.

Then moving onto Costs the basis of their number is "As I see it we need production at roughly 50% of what was our target production in order to pay our costs."
What you mean to say is "I'm just gonna pull a number out of the air, 50% sounds good" Its not really a surprise that you are so much out of pocket on your investments in WRES when you do not understand the fundamentals.

Look at the FID again. The OPEX calculation does not include debt servicing never mind debt repayment. Debt servicing is a cost yet you choose not to include it. I do not accept that $100mtu is an appropriate number to use (Its way to low) but even if you do $200mtu actual income less $100 mtu costs leaves $100mtu from that you then have to service the debt (interest only) Debt servicing is at least $500k a month. Do the numbers.......
Your numbers are not worthy of a fag packet

Correct getinthere.

FID Target = 15000mtu/month.
2020 H2 Actuals were 3820 +6698 Total of 10518mtu total in a 6 month period.
Actual monthly run rate for 2020 H2 was 1753mtu/month

So yes, "boy, do they need to increase production"

Stop posting rubbish Troajan.

Southwesterner was correct in what he posted. You are missing some vital part of his post
If you are going quote somebody, please quote exactly. What he said was "If the prediction of 90t WO3 and 40t Sn, metal, is correct - then that will be worth around $2.5m at current prices."

Note after Sn, he says METAL, not DMT. To get 40t SN at 50% you would need 80 dmt. 9000mtu wo3 you would need 140 dmt @ 65%

Its really very simple. lets break down how that number was then arrived at. 9000mtu x ($250 x 0.8) = $1,800,000 + (40 x $25000) £1,000,000 - (12% Sn Smelt fees $ 120,000) That is $2.68m Revenue. Southwesterner would not have used $25k tin price back in January hence the slightly higher outcome.

Safetyman, lots of words. A couple of points.
1. Forget the $110mtu cost calculation. That is created across a 6 year average and includes production of 4000t pain T3.5. It is not valid with current production rates, The cost per mtu will be higher than $110mtu

2. IF we assume your tin ratio of 1:8 (FID was 2700t W/400t SN So closer to 1:7) but we use your calculation ("we would have to add an amount for tin , say a ratio of 8 to 1, then 61 tonnes X .125= 7.625 tonnes total revenue tin = 7.625 X $25000 = $190,625)
The 7.625tonnes is correct, but then you have to look at the grade. Tin Grade in Q3 was 42.7% and in Q4 was 56.3% Lets take a basic average, the basic average is 49.5%. So the actual value of the tin would be 7.625 x 49.5% x $25000 = $94,359

3. The total revenue, using your scenario would be $94,359 + (6100*$200) $1,220,000 = £1,314,359

I've tried to keep it simple and used your scenario, However, the average Tin grade (corrected by volume) is a little higher then 49.5% Its was actually 50.8% in H2 2020 (9.8+18.8 Contained Sn)/(22.9+33.4 dmt Sn)

I'll let you draw your own conclusions around your insistence that 100t per month production is enough, but as it does not even cover the interest even at a revenue level before ANY costs are added, you will see that 100tpm does not cut it and why I said it needs a minimum of 150tpm to stand any chance with the current debt arrangements and even at that it is being generous
I've not looked at the Shard/ARC? Reports but they will not be incorrect. What is incorrect in peoples understanding of them.

Superflymofo made refence to the calcs posted by the mining engineer.

Here is his post from 14th Jan 22:16 (He is using Q1+Q2 Numbers)

Yeah, you know what - I'll tell you whats not quite right, you're not listening - there is a difference between concentrate and metal. If you dont know what figures you are quoting, go back and check, before posting more rubbish please.

106.5 tonnes of tungsten concentrate. Containing 61 tonnes of WO3 metal. The then APT price in H1 2020 averaged around $160. 80% payment of that. 0.8 x 160 x 100 x 61 = $780k.