Nothing majorly new in this other than they still seem very confident that we will get the DFS in June. The move to larger drives should have a major impact on the AISC.
► The outcome of the Pre-Feasibility Study (PFS) released in May 2017 was a mine of 936kt at 7.0g/t Au for 200,000 ozs of gold produced over a 5-year mine life. This was determined from the March 2017 MRE which totalled 701kt at 11.6g/t Au for 262koz (Indicated of 399kt at 11.9g/t Au for 152koz and Inferred of 303kt at 11.3g/t Au for 110koz). ► This was based on a mine design that used 2.5m x 3.0m ore drives to access the ore from underground, this type of mine design typically uses a Toro 151 or equivalent sized underground loader which has an approximate payload capacity of 3.5 tonnes. ► Preliminary mine designs following completion of the May 2018 Mineral Resource Estimate are now contemplating the use of a 4.2m x 4.5m ore drive to provide access to the ore for long hole open stoping. This allows a Caterpillar 1700 or equivalent sized underground loader which has an approximate capacity of 12.5 tonnes, almost 4 times the capacity of that contemplated in the PFS. ► Similarly, the larger ore drives allow for more productive underground development drills (twin boom jumbo vs. single boom jumbo) and allow for larger long hole drill rigs – all of which have the potential to increase the mine production rate well in excess of that previously contemplated in the PFS.
Just note that the reported AISC at the end of the presentation is the old one from the PFS, not the new one upcoming in the DFS. I expect this to be below $1000/oz. The mine is not going to be 50K oz per year, but likely to be closer to 90K. Considering EGA should be in production in 2019 the current SP is looking very cheap.
EGA Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
