This stock will fly, page-28

“these Projects can be troublesome at commencement of Commissioning and again it takes time to get everything right and tuned, once gradel is supplied to the Mill it will all work out ok IMO”

I haven’t read the FS for a long while but my recollection was that the projects NPV, IRR and LOM AISC are senstive to movement rates in the first 2 years.

“The Mine Schedule indicates that the first 24 months of mining will need to be at a high movement rate to uncover the required ore to maintain plant feed in later years."

I warned of this risk back in July 2017, ie the high initial strip ratios in the first two years which put a lot of pressure on the mining crews. In mathematical parlance the financial strength of the project is senstive to intial conditions, ie think small pertirbations in the intial conditions can cause large effects later, think chaos theory/ the butterfly effect.

https://hotcopper.com.au/threads/further-good-news.3532635/page-8?post_id=25925391

https://hotcopper.com.au/threads/further-good-news.3532635/page-12?post_id=25929396#.XBkHEBo_WhA

Also my post contains a table from the feasibilty which indicates a grade of 1.43 g/t in year 1 of the mine schedule and 1.52g/t in year 2 and then the grade drops to an average of more around 1.2 g/t for the years after that. The grades currently being achieved are around 0.9 - 1.0 g/t which is a considerable departure from the original expected grade. The consequence of this IMO, if the grades don’t improve, is that the cost of the large material movements will need to be carried by about 30% less gold than expected. I don’t know the exact nature of the financial model but unless the grade reverts back to the previously modelled grade soon, the entire cashflow model of the mine is going to change as there is no way of getting around the two years of high strip ratios.

The company has said it will publish a new mine plan based on the information from the grade control drilling this month. It will be interesting to see if they publish any new NPV, IRR, LOM AISC projections.

Here is the old feasibilty study announcement, if might pay to read it.

https://www.gascoyneresources.com.a...firms-Dalgaranga-as-a-High-Margin-Project.pdf

Where is your evidence that grade will be returned to the mill?

Eshmun