RE: RE: RE: The offer...
You wrote: “Downside. The grade is really on the low side, therefore you need to process more input per oz.”
Personally, I am not concerned about the grade. I think the intention has always been to generate large enough tonnage out of Bissa to produce 150,000 – 200,000 annual production ounces (as previously presented by management). Just ask Barrick about how successful large scale low grade operations can be. I recall Barrick having an operation in Peru that processes around .08 g/t gold, with not much by-product credits, if any. I believe Bissa’s M&I ounces are in the 1.7 g/t range.
In addition, Burkina Faso ground material is not like Quebec. It’s hard to mine open pits in Quebec because the material is generally hard clay. Plus, you have to deal with the harsh winters (with open pits in Quebec). I am of the belief that conditions in Burkina Faso are more like South America (vs open pit ground conditions in Quebec). In South America, (no harsh winters and) the material being generally sandy, especially in excellent mining places like Peru and Chile. The soft sandy material allows for very successful low grade open pit mining. Then you also have low cost labour (that goes into production cost). Burkina Faso is perhaps one of the poorest countries in Africa, if not the poorest. Unfortunately, it is also one of the poorest countries in the world. They welcome, and depend, mining to drive their economy. As a result, Burkinaa Faso appears to be an extremely friendly mining.
Kinross Gold understands the value of these types of deposits. This is why Kinross paid US$250M (C$282M) for the Lobo-Marte deposit (a fire sale price) late last year.
I recently posted my comparative analysis for Bissa. The Bissa value came to $50.3M. That was based on a fire sale price and no value for further ounces. Now, we know that the likelihood of Bissa eventually getting to 5 million ounces is extremely strong. No value has been assigned to those additional 3.3M potential future ounces in my analysis. Also, (within my analysis) no value has been assigned to once the 799,000 Inferred ounces get moved up from a $10 Inferred value to a $45.37 Indicated value. If we were to factor in everything I just mentioned then we are probably looking at mid-term future deposit value of around $100M and similar to the $282M Lobo-Marte ounce in the ground deposit value on a more long-term basis.
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=HRG&t=LIST&m=27232853&l=0&pd=0&r=0