Hi
@brianchu82I don't see this as any sort of drama. It's not like the stock has fallen to a few cents and is recovering or something like that. For the most part the Syama UG project is hitting the milestones as outlined in the FS approved by the board in 2016.
It is a very abmitious development which opens up the 3Mozs of reserves and 5.7Moz resource. So far 15km of underground tunnels have been built. I'm just back from a 30km bike ride along the ocean in Perth and 15km is an impressive feat. If you go to page 40 of the JORC notes of the original feasibilty study you will see a diagram showing the arrangement of the vertical drive tunnels that are being blasted and dug to access the ore body. The tunnels are 5mx5m wide and 35m vertically apart (that's the size of each ore block between horizontal levels, fabulous). The orebody straddles the boundary between interbedded basalt and argillite with polymict conglomerate and sediments forming the hanging wall. The density of basalt is about 3g/cm3. A 5m x 5m block of basalt has a volume of 25m3 and contains 75 tonnes of rock. This is the weight of rock that is needed to be removed to advance one of these drive tunnels forward 1 metre. To give people an idea of how much rock this is the link below shows a Volvo FH16 12x6 tipper trick which can carry 75 tonnes of rock.
https://www.basminingtrucks.com/en/mining-concept/vehicles.aspxOf course at the UG mine at Syama more specialised haulage trucks are used to haul the ore and development material to the surface, I'm only giving the picture so that people can understand the enormous task that the company is completing. Remember the capacity of one of these trucks is the amount of rock that needs to be removed to advance one of our ore drive tunnels forward 1 meter. There are about 40 of these drive tunnels on the first level of mining (level 1105) shown in figure 4 of the recent cave mining update announcement. Now imagine that our company has so far needed to moved 15km of rock like this to form the UG workings. That's the capacity of 15,000 of those Volve trucks. I think to many people think a gold mine is a share price chart on a screen. It is not. It is blood, sweat and tears.
The money made by shareholders in the period you bought was just the tip of the iceberg literally as the bulk of the ore sits underground and I fully expect that your friends will be thanking you in the long run if they can maintain some patience. Of course this is just my personal opinion.
There has been an expansion of the CapEx for Syama which has paralleled the expansion of the resources and reserves and the upgraded mining case since the initial feasibilty in 2016. Some will argue that there has been a cost blow out which may or may not be valid but to describe this development as a drama is wrong. The finance to get us to where we are today was no drama, it actually just appeared overnight with no accompanying shareholder dilution to the great disappointment of all the naysayers. The company expects the UG sulphide mining rate to reach steady state levels by the end of June this year and that's all I'm concerned about along with watching that recoveries rise along with the mining grade of the cave ore.
As per one of my previous detailed posts the sulphide production for the December quarter exceeded projections based on charts of the expected ore production from the ramp-up. We can't be sure what comprised the ore components of the sulphide production until more detail is provided but based solely on the previously published UG ore ramp-up chart and the assumption that the UG ore was entirity of the source feed for the sulphide circuit, the performance of the UG mine is in track and if anything exceeding projections by my estimation. If a large proportion of the sulphide feed for the quarter came from ore stockpiles that might indicate some problems with the UG mine so I'll be looking for those numbers when the quarterly comes out.
Thanks for your opinion and for keeping the conversation sane and level headed. Esh
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