huge boost for vcn/url merger ?, page-3

Yes, the plant acquisition is a game-changer for Kylylahti. The economics of the DFS were borderline which is why it had to be revised to a higher Mtpa production. Even then it was still only marginally profitable.

This seems to be because the resource was comparatively small, so the per-ton cost of mining and processing capex was relatively high, with a major expense being a $150M+ processing plant. At boom metal prices it was still viable but when the crunch came along it wasn't, and VCN did the right thing in putting it on ice to wait and see what happened.

What happened was they managed to pick up a processing plant already built, within 40km of Kylylahti, and set up for a similar type of ore, for a bargain basement price. This saves them at least $100M, probably more, which when the life-of-mine revenue was only expected to be about $1B is a MASSIVE saving.

It should push the economics of Kylylahti well into the black. In addition they have about doubled their resource with the new tenements so there is the possibility of more mines for VCN in the area with a free processing plant.

As to why the market hasn't responded, I think (and this is purely speculation) it's because the future of metals prices is still unclear and the URL merger is weighing on things further. The attitude of the market, as far as I can tell, has been that URL has been over-promising and under-delivering. There is naturally some hesitation to back the soon-to-be merged entity until it starts delivering the goods.