Novo Resources Corp T.NVO

RE:MY PEA SEDAR ASSUMPTIONS

[Popeye82]

HuberPeter wrote:

Dilution ist the key point. The PEA was calculated to be 20%. In the ramp up phase it is much higher, probable about 50%. 

Fresh ore
According to the mine plan, the main CF is supposed to be between y4 and y6 during the processing of the higher-grade fresh ore. 54% of these resources are inferred. The fresh ore is probably partially acidic and the permit to mine will be submitted soon. Without this permission B.C. is finished anyway. But doesn't make any sense of buying the mill when you are not 100% sure of getting a permit for the vital fresh ore. However, there is just a risk - netherless there is no hurry to assess this risk as permitting decision is not expected withing the next 12 months. Fresh ore will be mined at the end of y2.

Is it a 'common' ramp up problem?
I guess NO. The Millfeed according pea is also planned with 2.1 g/t in y1. And 2 Months processing was still some time. In addition Q.H. stated that turning to CF positive is awaited in the next few months. Obviously that was not the plan if you look on PEA Numbers and operative reality. Q.H. wanted to rock the mill with modest drill data. Plan once went badly in the pants. He now had to row back and starting a big infill program for grade control issues. At 10x10 for measured resources, about 1500-2000 holes are needed. I assume with about 1000 drills.

What will this bring?
Grade and oz outcome are highly uncertain due to nuggets conglomerates. Above all, it will be decisive which whether the high-grade inferred fresh mineralization (250k oz to 3.1 g/t) can be converted into indicated. That explains the particular urgency of starting now. There are big surprises possible, both on the top and an the bottom. We have to wait for the first drill 'assays'. An decreasing mill feed grade is not negative per se - if the take some lower grade between the reefs - due to the mill still has free capcity of approx. 0.4m / t p.a. Of course, a  higher mill feed with higher grade would be desiberable, but in this case they are likely to blend it down to feed the mill over longer LOM. But this looks unlikely. 

My risk profile has changed dramatically.
20% investment - 80% speculation.

DYODD


Peter

 

@HuberPeter,

that Post,
Last Sentence,
should add "sooooomewhat Optimism" to your Judgement ??
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