I thought it might be worth looking to roughly quantify the geotechnical aspect to the DFS optimisation. I think I mentioned a meaningful 10c / Lb guesstimate a month or two back. Given the indications from drilling are positive and steeper footwall slope is now "expected", what exactly can we expect?
Improvement in strip ratio per the PFS is forecast to be from an average 6.0 to 4.3. A 28% fall in average dirt moved per tonne end product. This is particularly an advantage in years 3 & 4 where the current 40° angle is not well suited to access the magnetite. Strip ratio is 12.6 in year 4, double the average and a costly period for us blowing out our (still excellent) average $/Lb.
The greater angle will lower mining cost, 22% less for 3% more V2O5. Benefits will also be seen in revenue, labour, employee costs, flights, equipment hire and maintenance... but let's just use that 28% fall in average mining cost.
31% of our $US4.27 cost per pound is $1.32 in mining cost over the life of the mine. It's a really big chunk of our opex. 28% of that is 37c. Thirty seven! Cents! US!
It probably doesn't sound like much when we think of V2O5 at $35 or whatever it is, moving by dollars or more a week... but when a buyer sees $3.90 printed, it's on.
I'll try to relax some now. We all want a DFS with this nice and official but the more you understand before you know, the better. The PFS keeps on giving.
