Resource Update, page-29

@speccy I have a bit of a different view on the Century deal. 


1) Atila was effectively the shell company they vended the project into however the Evan Cranston and Patrick Walta who have some experience in tailings retreatment (Raging Bull). As we can probably agree AML management is probably light on experience to operate a mine, especially not a tailings retreatment operation which is more technically complicated. They are more suited to prove up an asset and then look for a much larger operates for JV/takeover. They probably knew that and wanted any deal with MMG to cover the risk of not recovering the Zn tailings and just being able to use the infrastructure. Raging Bull probably were able to take on the project and take on more risk than AML wanted to which led to the deal falling through for AML.

2) At the time the Walford Creek resource was not that large and needed a substantial acid credit to justify developing it (which it doesn’t need now). It would have been challenging to refurbish the mill/infrastructure and prove up Walford Creek resource in parallel. The market values quick payback (as claimed by NCZ) and that would probably have not have happened with AML.

3) Tailings retreatment is challenging. NCZ zinc recoveries are still not at name plate of around 60% recovery - they are only at 45-50% currently. This has a massive impact on profitability and could jeopardize their ability to operate if they are unable to improve this. Added to this - the zinc concentrate market is currently in a massive surplus - i.e there is not enough smelter capacity to treat the zinc concentrate being produced (which is why zinc metal is in shortage). NCZ are paying massive discounts on their concentrate as it is non-typical specifications to sell it to smelters. There is also a risk that smelters may not be able to take all the material they produce due to the zinc concentrate market being in surplus (affecting their cash flows). All in all there is still a lot of risk and certainly not the slam dunk, ‘no-brainer’ deal if it mean’t AML needed to take on a lot of risk/debt.


Long story short - would have been great in theory to have their plant & infrastructure but the devil is in the detail on the specifics of the deal and whether AML could have taken on that risk at that time.