Mine Life and head gradesPaths , you want some more numbers. Sure I can do that but the perpetual pumpers are not going to like them.
Your estimate of remaining mine life of only 7 years should get everyone s attention here. I had only done a very preliminary calculation on that and come up with 9 or 10 years. Sure exploration sucess could extend both our estimates, but we both know that 43-101 regulations basically prohibit mining professionals making those kind of projections. And of course there will be considerable costs in defining where these extra ounces MIGHT be found.
Despite ongoing failures to achieve guidances , PVG has been able to meet debt obligations. There is only about four years remaining. However , you and I both know that without arguing over the exact magnitude of the reserve write down , the amount of depreciation charged on the financials will escalate over the next few years. Add to this the increased production costs that Joe O alluded to last week , the financials are going to be under increasing pressure. Obviously rising POG would reduce this pressure but equally a fall to even $1450 or so would exacerbate todays difficulties.
When the resources / reserves were reduced in april 2019, from memory there was around a 4 million ounce loss in ounces, or about a 14% reduction. I was surprised that the reduction was only this minor. My calculations at the time suggested that at least 30%, or even 40% of these resources were imaginary . However the 14% reduction was largely in the inferred category and we both know that a lot of imagination can be used in allocating numbers there.
You are almost certainly correct that both tonnes and grade will take a hit next month. Grade alone should drop from 13.8 or 12.6 or 11.2 to around 8 gram. Sure it might be a bit better than 8 grams on paper, but recent mill heads would not support excessive optimism. Snowden and Tetratech have their professional reputation to worry about, plus their work is to be reviewed by Optiro, so regardless of how unconcomfortable their numbers make the client, I believe the new numbers will be a lot more reliable. So lets just say that the grade will take at least a 30% hit.
Tonnes is bit more difficult to evaluate. At a minimum , there is a 1.3 million tonne reduction due to milled 2019 production. As you state correctly , the underlying issue is projecting all potential ore intersections too far into host rock. There wiil be a mitigating effect due to the increase in POG, but surely all that will do is increase the volume of 5 and 6 gram rock...... and I think we have more of that today than we really know what to do with. So lets just double the known 1.3 million tonne reduction , and say tonnage will drop from 16 million to 13.4 million tonnes., or a 16% reduction. Total loss of ounces is 46%!!!!!!! If th\at doesnt cripple all the financial models , I dont know what will.
You may well object to my broad brush methodology , but I have to remind you my calculations have proven more reliable than yours or any of the financial analysts over the last three years. In your defense , re computer modelinng , garbage in , garbage out.
As a final summary , I am not convinced that mill heads in excess of 7.8 grams are attainable going into H2 , and hence I am still bearish and repeat my call for an SP sometime in 2020 of around $6, and headed south.