Milesy, strip ratio is only relevant in conjunction with grades and geology, the main secondary consideration then is what your stripping (eg morphic rock vs sedimentary). It's all guesswork without being an insider, as an example though some low grade surface mines work on 0.4:1. As a mine gets deeper it isn't unheard of to have costs as high as $700 block. Keep in mind this is just to remove a chunk of dirt with no gold in it. To be honest 35:1 could almost be described as nuts. 20:1 is bloody high.
MAJOR GENERALISATION: U.G. is 25% higher cost for 1:1 SR mine based on 10k tons//day, with additional time-cost of money and high upfront capital reqirements further damaging the NPV. So based on 35:1 we're killing that ratio...however, we dont have the shapes or quantities to meet the 10k/day. Our vens are VERY RICH but smallish, I can't tell how separated they are. But it's a bloody good gamble based on the information we do have IN MY OPINION.
The only time these ratios would apply is when the veins are very difficult rock that won't break up well and inconsistent shapes to underground mine (parts flat, parts vertical and parts at angles. I.E.; If there was heaps of molten rock that wouldn't respond to explosives very well (this doesn't seem to be the case) or the veins have huge gaps (lateral and vertical) between them and eahc variation was angled remarkably differently then the costs of trying to apply 3 or 4 different UG techniques would be prohibitive so the company might decide it;s better to just remove the shitloads of overburden and build the roads etc...
The geolgy of our reserves ALSO IMPLIES that we will ahve reduced processing costs. The costs to extract the gold from the mined ore when its loose grainy rock with concentrated gold measn cheaper chemicals and grvaitational techniques will do the job with less costs and less reclamtation (eg water)
The IMPLICATION of our reserves, however (M5 seems the simplest) seems to be that they are sharply angled downward. The report does state they are in rock that has numerous cracks and weaknesses, so it's gonna crumble nicely (the primary losses would be fines, too small to reclaim; which is the ideal because it means simple ore processing); because of the weaker rock, horizontal veins would be a pain in the a, as the rock would have trouble holding a ceiling to take the ore out at broad levels meaning heaps would have to be left behind in pillars that hold the room up (imagine a big room that you dig out horizontally as opposed to a funnel that you progressively blow up from the bottom of a semi-vertical orebody ). Once again, it APPEARS that the majority of our veins are angled downward, which is the ideal for our ore. I don;t have anything other than the public documents to judge this by, if I had the mines docs I could be certain.
INFOMINE.COM has heaps of info and pictures and costings on this.
That's why I am so bullish on the next DFS, expecting 4x better the the last one.
The angle of the dangle is probably the key factor WAF are analysing via more drilling across the current drillholes.as it will determine the best UG technique.
The comparison is that if you go underground, all this stripping is replaced by the cost to build access from the bottom before you even start, there is a time cost as well as the huge intial capital outlay. WAF has surface gold that they will be mining while about 500 metres from the edge they start building enourmous access ramps and pulley systems down to the bottom of the underground mine. Whetehr this will cover all of the UG capital costs or only part is what teh market waiting for, because an CR will be determined by that. A reasonable range to expect would be $40-60mill, so POSSIBLY 50-75% covered by open pit, with finnacing or a CR for the rest.(Hopefully they will be available to achieve a financing option.
Many older-school engos use a rule-of-thumb that it's best to open-pit as far as you can..this s wrong though; especially when the geology is majorly beneficial for gravitation mining like stoping. Which the reports to date suggest our mines are.
That's just an amateurish cook's tour mate. Good luck, always DYOR.
WAF Price at posting:
27.8¢ Sentiment: Buy Disclosure: Held
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