Investors here will probbly need a little more patience as the picture unfolds.
The proof of successful execution of the mine development plan at Syama will come in stages.
The first major milestone will be hitting the UG production rate at Syama of 200t/month or 2.4M/annum (expected in June 2019). In the meantime UG production performance can be benchmarked against previously reported ramp up estimates.
The second milestone is to see that recoveries from the sulphide circuit start to improve with grade to approach the initial target of 85%.
The company said in its last quarterly update that
“With the completion of the final tie in of the P85 project during the recent roaster shut, immediate improvements in recovery have been seen during periods when underground ore has been processed. Recoveries for this material has achieved results over 85% during periods of the initial commissioning period. Further circuit optimisation combined with increasing proportions of underground mill feed are expected to result in a consistent improvement in recovery. This work will deliver the targeted P85 recovery of greater than 85% once the circuit is exclusively fed from steady state underground ore.”
If we see recoveries starting to approach 85% with coinciding mining rates of 200t/month by June, two of the major milestones will have been met. We then just need to wait a bit longer for the Hybrid power station to become fully operational by the end of 2020 to see the full 40% cost savings flowing through to the bottom line.
The progress of the operations at Tabakoroni will also be a determinant of the short to mid-term success of the company, particularly in regards to cash flow. If you compare photos of the Namakan pit at Tabakoroni in the Sept quarterly with photos taken in Dec, the progress is plain to see. We should soon see some metrics on the performance of this pit in the up coming quarterly now that we are into ore there. Esh
RSG Price at posting:
$1.16 Sentiment: Buy Disclosure: Held
(20min delay)
