EGA 0.00% 28.5¢ egan street resources limited

Could be because of investors wondering some of the logic in the...

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    Could be because of investors wondering some of the logic in the video on higher tonnage throughout mining and is apart from the ambiguity of the ore sorter recovery rates .
    At 7 minutes into the video it shows a diagram of two ore drives one at 2,5 meters by 3.3 meters and a larger one at 4.2 * 4.5 meters which is the new proposal
    (4.2 * 4.5)/(2.5* 3.3) = 2.5 times as much rock needs to be removed from the larger ore drive for processing. That is a lot of dilution .
    The costs given for the larger ore drive is $85 a tonne due to larger equipment economies of scale . The cost for the smaller ore drive is $146 a tonne
    Given the narrow vain nature of the ore body all the ore should be available within the width of the smaller ore drive
    85/146 = 58% lower cost per tonne for the larger ore drive without taking into account total ore drive tonnage
    58% * 2.5 = 45% higher cost for the larger ore drive when taking into account the extra tonnage needed to extract the ore from the drives .

    But the redeeming point of a wider ore body due to available access , is that the panels guessing (3 meters wide * 16 meters )vertically between each level(drive) which probably make up 65% of the total tonnage and width is independent of ore drive width ,and means the ore to be extracted can be drilled out faster with a twin boom jumbo compared with a single boom jumbo so that would be where the lower costs are , and it was only quickly mentioned in the video and almost as if the MD did not understand that significance !


    Its hard to know if the redeeming feature of the wider ore body allowing faster mining via drilling with a TBJ as against an SBJ and mucking out with a larger LHD overcomes the dilution and extra cost of wider drives , and having to use an ore sorter without more information from the company on costs .
    I would like to buy in if I was more aware of the costs per oz .........
 
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