So much Volume AUZ, page-313

Not trying to be cheeky at all- I think the main of the post was worthwhile considering.

>original post with the offending last sentence wiped<

Processing laterite ores at a cutoff of 0.3% Ni is simply ludicrous.

Here's a real life example:

BHP built Ravensthorpe for AU$2.2B (BFS forecast of AU$1.4B CAPEX) and incurred a further commissioning loss of AU$1.4B before shutting it down within one year of opening.

First Quantum "won" the tender to buy Ravensthorpe for ~$0.3B in 2009 and poured 100's millions more money into the project before reopening in 2011.

They operated at a head grade of 1.2-1.4% Ni but seldom exceeded 80% of nameplate nickel production (produced 20kt Ni instead of forecast 25Kt).

Ravensthorpe shut down two years ago as revenues fell well below total production costs of US$6.34/lb.

Today's nickel price of $5.80/lb is still patently insufficient to justify turning Ravensthorpe back on despite writing down most of its project capital (>$4B) and only requiring a few months to get going again.

AUZ can only manage to spit out an "economic reserve" on the basis of some highly questionable Ni+Co price forecasts, construction and production timelines, rosy capital projections, upbeat lending assumptions and a few government grants.

P

End original post. Perhaps now my above reply
Might make some sense.