the full monty, page-10

GeoBrand, doing some rough numbers can help as SFR are short of details in their recently updated mine plan. The resource is updated as at 31st Dec 2015, and the mine plan states they have 8.1Mt to mine at the De Grussa mine, at 1.6Mtpa that = a tad over 5 years, so the are all done by the end of 2020, practically a mines production profile will taper off toward the end so it would take them till the end of 2021 if they identify no more ore at De Grussa.

Now Monty is said to have 763Kt of massive ore, SFR typically convert all into a mine plan so lets say in total it is 6 months ore feed. It will of course take them longer than that to mine so the ore will be trickling into the plant topping up. Not knowing what they have done in preparation for starting Monty, but if we assume they put the mining lease application in today, they should have it by the 1st Jan 2017. In the mean time they are doing all the other planning and approvals they could conceivably start digging on 1st Jan, ie. box cut and decline start. Monty doesn't really start till about 150m below surface so if they go hard they could be starting to develop ore in Jan 2018 and could have stoping ore out mid year, and therefore a consistent flow of say 250Ktpa from then on, so I would say Monty, current resource, would therefore be finished at the end of say 2020 and would have allowed a smoother finish to De Grussa as ore runs out in 2021.

This is where VRX's JV with Thaduna comes in, the Monty discovery was 12mths ago, but in practice it's the first economic discovery outside of the De Grussa mine in over 5 years, and looking at Monty it will be 3 years from discovery to stoping, so if a new orebody was found tomorrow then the earliest it could be producing a sustainable flow of ore is mid 2019, so the clock is ticking, barring resource extensions to current orebodies (which will happen) new orebodies need to be found in the next 2 years or the risk is they won't be available during De Grussa mine life.

IMO Thaduna could supply +3Mt to De Grussa, at a lower grade, but from a surface pit and shallow UG, ie cheaper mining to offset the lower grade, and hey profit is profit. This equates to +2year of much needed time. Plus don't knock VRX's last and deepest intersection, [email protected]%, pretty bornite from what I remember, that's a nice number. @nammuldi posted over there a similar feeling.

I can't see that SFR can ignore Thaduna much longer as it may well run out of time trying to find the next one, and yes Monty has a mighty grade, and grade is king, but if it takes longer to find it than the mine life it gives your reserves start to dwindle to nothing.

Tubber