Just to clarify part of the answer JW gave you on the GIC. He basiclaly told you that most of the value of GIC "reserves" / inventory is in the form of a high carbon concentrate with a grade a little lower than what is being proceed through the circuit of about 20g/t.
JW between your question and a previous question really put to bed the mystery about the high levels of gold in this circuit, ie that the high carbon concentrate is being stockpiled awaiting a future investment in the low carbon roaster which he confirmed will have a small capital cost of about $20 million and will have a very high internal rate of return. The reason this investment hasn't been made yet is because the low carbon roaster project is "the incremental improvement" that will add only about a 4-5% improvement to the total sulphide circuit lifting the planned recovery from 85% to more like 89%. The focus at the moment is on the P85 which has been confirmed by JW to have been completed in this quarter and the company is waiting for Syama UG ore to be the only source of feed to the sulphide circuit so it can achieve the 85% target. It is interesting that JW described the high carbon concentrate stockpile as collateral against the debt of words to this effect. I wonder if the lenders think of it the same way considering there is no way to currently process it. I suppose the expansion of the syndicated loan by US$50 million is an indication that the lenders have confidence in the "show me" story at Syama or that they weren't happy with the existing level of liquidity. Either way the ability to draw down another $US 50 million significantly strengthens the companies balance sheet and strength in the eyes of the market as it is very unlikely that we will see any immediate share dilution through a capital raising. When JW said the credit line is expandable he meant it and the company has received more money without any fanfare or even the need for a seperate market announcement.
I noticed from the table in the quarterly that the. UG grade from Syama is 2.66 g/t but production was a little short of the 180kt/quarter that I'd estimated from their ramp up chart at a little over 167kt.
JW said on a number of occasions that this is a "show me" story, pretty much what I've been saying. So I am still personally setting my milestone for the March quarter at between 320kt and 355kt form Syama UG. I noticed JW referred to an expected grade of 3g/t several times during the discussion which is above the reserve grade of 2.7g/t, which is an encouraging tell. He also said that the automated long hole drill rigs are currently being commissioned and has confirmed that sufficient draw points exist to meet the targeted ramp up which is comforting and in line with my observations of the 3D developmemt plan.
I thought JW was a little evasive when questioned on the depth of the oxide and outlook on the oxide production at Tabakoroni going forward. Basically the answer is that the deposits there are steeply dipping and their oxidation is highly variable along the 1.5 km of strike so they are continuously assessing the oxide component against the mine models. One question I would have liked to hear answered is how long the open pit mine life at Tabakoroni actually is. The actual recovery through the oxide circuit isn't as important as the open pit mine life IMO as transitional ores can still be fed through the circuit. JW did mention about having hit a good "patch" or words to that effect and that the oxide production was a record for the quarter. I'd say if they can maintain the same level of production in the March quarter that will be a good result. Based on my expectations they will actually need a better result, new record quarter in March, to have a chance of meeting full year guidance.
We also have been told that drilling is underway at the two deep ore shoots at Tabakoroni and that we will see a maiden ore resource/reserve published for these ore bodies during the quareter ahead of UG mine modeling.
It would also be an interesting question for JW whether or not the sulphide ore at Tabakoroni hasn't the same double refractory properties as the sulphide ore at Syama, ie will it be easier or harder to treat than the Syama ore?
All in all not much more guidance given on the next two quarters progress than we had before but JW has clarified a lot around the GIC for me and others who may not have been aware about that high carbon concentrate stock pile. It's also good to have continued conformation that the new leach circuit is working and producing the desired recoveries in the sulphide circuit when fed with the higher grade ore from UG. The real proof however will come once the sulphide circuit is wholly fed by the UG mine, so maintaining a certain level of skeptisism with respect to the recovery performance is a health stand to maintain for now IMO and that also goes for the ore production ramp up from the. UG mine. Esh
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