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http://www.reuters.com/article/us-guinea-mining-idUSKCN0ZF2NN?type=companyNews They will be looking for JV's and SMA an obvious target. Good news on the appointment as well. I'm in

profitable in Ni because of unsustainable high grading.

They have reduced costs by high grading the deposit. That high grade resource is not infinite, are those grades sustainable? Personally I don't think they are, the main reason being that they are going to run out of underground development.

Well I guess I've got it wrong in all the gold mines I've worked at! The more you mine of what? Grade of the ore is variable and the number one driver of cost in a mine is grade. You can mine as many tonnes as you want, if the grade drops your costs will go up. Freda is mining 2g/t underground which is marginal and leaves no room for dilution. Increasing tonnage and maintaining grade is extremely challenging especially in an aging deposit like Freda where the best bits have already been mined out. For an example of how higher grades result in lower costs have a look at what is happening at Trojan, where they are mining less tonnes but keeping costs down. The problem with mining all your high grade at once is that it can seriously reduce your life of mine, or kill a project completely, which they are in danger of doing

Sales have nothing to do with costs. You can increase sales by pushing through more tonnes at lower grade, but your cost per oz will increase compared to mining a smaller tonnage at better grade. Lower grade = higher cost, pretty straightforward really.