EAR 0.75% 33.3¢ echo resources limited

The mill isn't what let Navigator down. Go look at the history....

  1. 11,185 Posts.
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    The mill isn't what let Navigator down. Go look at the history.

    It might be a task now to rejuvenate the mill but that's another issue. If you want to learn from the past you've got to look at why the mine failed in the past.

    As I said at a gold price of +$1,700 and with an appropriate mining fleet, well modelled pits and enough grade control there shouldn't be a reason for this company not to be able to produce 100,000oz per year. The Stage1 plan at the moment only draws in 407koz at 2.0g/t (NAV started in March 2010 with 490koz at 1.8g/t). The AISC rises for stage2 to $1171/oz reflecting the slightly higher strip ratio.

    Navigator failed for the same reason most of these juniors fail, it became constrained by lack of money. All you need is one unforseen problem like a slippage and it sets the forecast cash flow back and the company never recovers as expectations are dashed. As mentioned NAV claimed to be held back by lack of skills and equipment availability during a booming period in WA (which might be true), the lack of money forced the company to develop the Cockburn pit in a series of staged cut backs instead of developing the pit down at the same level. Once the slippage on the western cut back drove up the cost of accessing the high grade ore, that had been uncovered, the company deferred that area and scaled down its guidance forecast. The lack of money and falling gold price did the rest.

    The company failed because it couldn't feed its mill (material movement and grades not reconciling). Move that dirt.

    Eshmun
    Last edited by eshmun: 09/05/18
 
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