RE:Money dude. Here's my best stab at your pooh pooh of NICO Jim, thanks for your reply, it's nice to have some discussion and have other perspectives.
I simply took the Reserve and Resource (33 million tons) and divided by the revenue if 80% of the contained metals were recovered and sold (4.8 billion). This equals an average revenue of 145 $/ton of process plant feed. I think 80% is fair because you have losses at the concentration and recovery steps and dilution from the surrounding host rock. This means that over the mine life your average cost to build, mine, concentrate and process had better be substantially lower then 145 $/ton of process plant feed. I always benchmark revenue and cost to the process plant feed rate to normalize the revenue and expense calculations. Over a 20 year mine life, that equals revenue of 240 million per year which I think is consistent with the FS.
My point with caribou is that an existing mine with installed and operating equipment and machinery struggles to make money with a plant feed stock worth over 300 $/ton (including smelting costs as well). I agree it's a fully U/G mine, but the development and infrastructure is existing, whereas everything with Nico is still to be purchased and installed.
If you believe in the FS, they list the average cost of mining, concentrating and transportation as 39.71 $/t ore milled (p22 FS). THis means they expect to operate mining and concentrating operation of 4,500 t/day for a yearly cost of only 68 million. That is laughable amount of money for the size of the operation, working in the NWT. Maybe in the congo you could achive that, but not in the NWT. As I stated previously, Red Dog mine costs 124 $/ton processed (not including smelting) and that is an established mine by a good operator.
The most important parameter of a deposit is absolutely the concentration metal. If it costs more to mine and refine then you can sell it for, then you will never develop it. Secondly the size of the deposit determines the project economics and whether it will proceed. At the Ekati mine, they have an enormous resource (jay pipe) with a tremendous number of diamonds. It will never be developed because the ore value / ton is too low to mine economically.
In no way would a mining company trust an exploration companies feasibility study. Assumptions and projections are made to magnify the deposit's potential. A miner would complete their own feasiblity study based on the block model prior to purchasing a mining claim / exploration company. Contractors and consultants are notorious for providing sweet smelling estimates and assumptions in the hopes a project will proceed - there is major money to make once a project is green-lit.
The proof is in the pudding though. This project has languished because it appears no one believes in the fundamentals. If there was 1-2 billion in profit to be made, FT would have their choice of miner's to choose from.
Do you think it is possible they can mine and refine for less then 145 $/ton process plant feed stock?