Dalradian Resources, Inc. DRLDF

RE:RE:RE:Positive Feasibility study!

[R_J_]

Dalradian Announces Positive Feasibility Study for the Curraghinalt Gold Project Demonstrating High Profitability and Strong Returns
Offical PDF version
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https://s1.q4cdn.com/162468244/files/doc_news/121216/DNA_PR-Dec-2016-FS-FINAL.pdf
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Louis James Comments
Quote:
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This is excellent news from Dalradian, though in disguise as “merely” good news.
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Specifically,
1] gold has dropped since the line was drawn in the sand for this study, making the $1250 gold price assumption (GPA) look aggressive, and
2] the projected after-tax internal rate of return (IRR) is a decent, but not stellar 24.4%.
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As for the GPA, we’re confident gold prices will be much higher by the time this mine goes into production, but even if not, the mine still generates a good 20.1% IRR at current gold prices.
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However, even without higher gold prices, all of the company’s test mining produced more gold with less dilution than predicted.
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More gold from less rock means higher margins.
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That’s where the company’s statement that a 20% improvement in grade least to a 39% improvement in IRR becomes so important.
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That implies a very robust 33.9% IRR as the base case, or 27.9% around current gold prices—and that’s more than good enough.
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And that’s not counting the other optimization strategies the company is working on, nor the fact that this is based on P&P mine reserves that are only about 75% of the M&I resources.
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All resources and reserves should continue growing as drilling continues.
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Plus, there is still plenty of discovery potential in this play.
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Another strong positive is that the amount of capital required to build the mine is well within the reach of a junior mining company to raise.
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In short, the base case strikes us as conservative, and a floor upon which to build more value, which we do see ahead.
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End Quote.
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RJ