Pamplona Trader,
I refer to your posting in which you refer to a link of Doug Beattie's assessment of Heron's Woodlawn Project.
You wrote:
"Below I will share his overview of some the more advanced Zn projects in Australia, since it is very relevant to the discussion here on Woodlawn and Thalanga. Enjoy:"
Beattie's reference and concerns to Woodlawn being a struggle in its previous life is apparently NOT THE CASE - not in the 10 years that Denehurst operated the under ground and Heron has monthly records this which showed the operation being a consistent cash generator for every year except for the last 7 months of operations.
With reference to Scale - up to pilot plant recoveries: History will be the judge of this. The newly appointed Woodlawn GM is adamant that they will do better than the lab work ( his experience is Woodlawn and McArthur River and he understands difficult metallurgy.
Mining of remnant material adjacent to old workings with unconsolidated fill – he missed a big one here, Heron intends to use consolidated fill which is a fundamental difference to the previous operations. Cemented paste will provide both local and regional support.
Capital for the mining portion (being mischievous in not portraying the full costs) – this perhaps reflects a Canadian not understanding the way an Australian mining company approaches a project. There is absolutely nothing fishy in the way the mining capital is reflected in the documentation. Heron have costed the mining capital required up to the point they start to produce zinc concentrates – this goes to the heart of defining development capital (and therefore funding). Because Heron have tailings feed to commission on they are able to keep the mining capital to a modest number. Heron still incur the mining capital through the decline development – full costed in the financial model.
Unit rate mining costs – the mining costs were built up based on a contractors schedule of rates and the planned activities. These are sufficiently accurate for what Heron were doing and far more so than rules of thumb. RoT are fine but you will find every mine is different and there is lies the danger of assumptions.
With his assessment and concerns of the Woodlawn project the writer mentioned he would likely still take an interest buy some Heron shares. Perhaps if he was to put all his concerns directly to Heron, he might just decide to take a bigger holding.
HRR Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
