RE:stockbroker discussionHad a lengthy discussion with my broker today about r n x. he believes the share price will only do good if we find more boulders. I believe it doesnt matter if the gold comes in the form of boulders,nuggets,slabs,or coarse gold,or 8g/t gold. $500 million worth of gold is $500 million worth of gold,doesnt matter in what shape or form,thats how i see it. Yes,livingrooms are best,cheap mining,short distance,low labor yadda yadda.......would like others opinion on are you concerned if we fing no more boulders? as long as were finding high grade ore and make 500 million$ in say a couple years without livingrooms of 4000g/t ore,profit is profit right?
Well you're right that we don't need boulders but 8g/t would raise questions: not so obvious how much profit the company can make from mining ore like that. Grade is crucial as lower grade means more cost/oz produced and, obviously, many more tonnes of ore to make a decent reserve. Broadly speaking, cost/oz is inversely proportional to grade.
@ 8g/t revenue of $500m would require ~1.6 million tonnes of ore to be mined & processed (at a gold price of $1,200/oz). For reference, 132,000 tonnes of gold ore were mined at Beta Hunt in Q2 (at a grade of 3.1g/t).
10g/t is my mental cutoff - at that average grade I'd be pretty confident that RNC can make good profits, as long as there's enough material of that grade there. Below that and I'd be worried.
So, boulders not necessary but establishing that we've got plenty of high grade ore is.
Based on the geological model and hsitorical drill results, I would expect more bonanza grade material to be found - but it's not likely to be continuous and methodical exploration will be needed to find it and find out how much there is. ISTM that much more selective and targeted mining than RNC have been doing historically will be needed to get the best out of Beta Hunt.
Cheers,
Mark