Has anyone thought about the economics of a target at 650m...

Has anyone thought about the economics of a target at 650m depth. There has never been in the history of the world any economic discovery of any metal that has gone into production much deeper than 200m initial depth. The drill out costs alone for a 650m deposit are unbelievable and the company would have to find $100 million just to get a resource.

A mine is considered deep if its greater than 1km and deeper than 2km gets you in the top 10 deepest mines in the world. In just about all deep mines the orebody extended to the surface so the reason why a mine is able to get so deep in the first place is that development is paid for by cash flow. Even then then as mine gets deeper the ground conditions become more difficult and many mines become uneconomic around 1.0km to 1.5km depth because of the expense of supporting the ground.

It will cost $100 million just to drill it out and other $200 million for the feasibility it will cost $1.5 billion or more to get into production and the operating costs would be around $200/t of ore . Now work out the size and grade of a deposit that can support that. Remember Nova was at 120m depth and it cost around $500 million to get into production and the company raised $200 million prior to that for around $700 million all up. Nova net cash flow is estimated at $2.5 billion, which is a comfortable return that justifies production but it is not world class and IGO would have purchased the deposit thinking it will continue at depth to justify the $1.2 billion it paid for it.

So this target will need to be 5 times bigger than Nova and double the grade to even have a half chance. A single off hole conductor a few hundred metres in strike wont even be close.