In simple terms it's a 3D shell produced by feeding in a bunch...

In simple terms it's a 3D shell produced by feeding in a bunch of parameters (mining cost assumptions) into a program with algorithms that are driven by the grade and tonnes in the geological resource estimation model. The pit design is defined by the shell so it's what the pit might look like at 1600AUD POG, but importantly it is also used to capture the in-pit JORC resource at the same POG.

There are three reasons I've bought in for a LT hold. One is because if you look at all of the the cross sections they seem to be intersecting additional lodes (e.g., new HG footwall lode, upper hanging wall lode) with step out drilling which in turn is increasing the total accumulated thickness of the mineralised lodes (or ounces per vertical metre (OVM)). The more important reason is that they seem to be finding more high grade material which has the potential to give the average grade and the contained ounces a decent boost. The third is all the smoke around. Although there's not a lot of HG gold around yet, with time they could zero in on a higher grade deposit. Although the project looks pretty good now, a higher grade deposit could enhance the project economics significantly.

Another thing about the 1600AUD pit shell: If the step out drilling does intersect additional lodes, the grades increase, and\or the OVM increases, this would tend to drive A$1600 pit shell deeper and wider to capture the additional ounces. Nothing is guaranteed and some of this is speculative but the step out drilling seems to be coming up with the goods.