RE: Nomz13 Aug 2016 14:42
I have interest in this because I'm underwater on it. I was delighted when the old board were ousted and hoped someone with a proper knowledge of mining would come in and fix it. Instead we have a pathetic board with ZERO hands on mining experience and all I am seeing is bad mistakes being made by accountants running mines. They are making short term decisions to make themselves look good, while ignoring the effects of these in the mid to long term. They are also extremely selective in what they report, particularly in terms of capex. I’d like to know how much the deepening project at Trojan and the plant expansion at Freda are costing for example.
A few comments:
$950 an oz will never be achieved at grades of less than 2g/t. Increasing tonnages will inevitably result in a grade drop as well. There are reasons why this hasn't been done before.
The smelter requires tonnages of over 2x what they are currently mining. Where is that coming from? High grading has also sterilised huge amounts of low grade ore making increasing tonnages even more unlikely. The smelter is a complete white elephant that should have been halted immediately.
High grading to break even when prices were at the bottom was a crazy idea and a typical accountant decision. The mid to long term effects are beginning to show. Lower grades due to lack of access to high grades, says the update. That's one of the classic effects of high grading, mining outstrips development and you hit a situation like this. Any miner could have told them this, but no, the accountants decisions win. They have also not considered the large areas of low grade ore which are rendered unmineable by high grading.
Also neither mine has currently met indiginisation targets.
As for Zani-Kodo, it's the best project the company has by a long way and the main reason I invested. The exploration team that developed it were excellent and did a great job. Unfortunately they were never given a chance to progress it fully. As usual what money there was got thrown down the toilet at Trojan. They should have spun this off as a separate company not have it dragged down by other poorly performing assets. Investors want gold only companies, so as long as it is shackled by BNC it will never attract the interest it deserves. Unfortunately all the good people involved in the project are long gone. Who's running this going forward? NE DRC is not an easy place to operate and it is expensive. The comparison with Kefi is meaningless as it is not in DRC. Their resource is also 100% open pit and largely oxide (important little mining things). Zani has zero oxide the resource is split over several areas some of them low grade. The main Zani mine area has also been depleted at surface so can only be mined underground, i.e. expensive. There are several +million oz projects sitting undeveloped in DRC, there are reasons for that. The general consensus is that 5Moz is the realistic minimum to
Sign In
Follow the stocks
