RE: RE: RE: RE: why is the stock price low?I wouldn’t entertain the thought of sending Ursa’s ore to Vale’s Clarabelle mill. Vale has more ore in the Sudbury basin than they can mill. Vale’s Clarabelle mill will not have room for ore grading at less than .38 ni. The scariest thought for Ursa is Xstrata milling Vale ore; they have processed Vale’s slag.
I believe the reason that share prices are so low is: the big investors consult with Geologists and Mining Engineers and here is some food for thought.
The Feasibility Study was based on a 4,500 T/P/D mine mill operation. And even this scenario was not that attractive. The only way to make money with low grade ore is to have high production.
Ursa is almost finished mining the 200,000 tonnes of near surface ore that is easily accessed. Xstrata will most likely extend the contract with Ursa however watch the wording, Xstrata will agree to accept more ore but the question is will Ursa be able to deliver?
Ursa will soon have to start removing waste rock. The waste rock will most likely be acid generating requiring it to be stored in an engineered disposal site. This will be a substantial undertaking requiring dikes, dams, water treatment facilities and electricity. Construction costs will be quite substantial and operating costs will increase by a huge margin. There is no money to be made drilling, blasting and hauling waste rock.
I don’t think sending small quantities of low grade ore to Xstrata will fund this operation at the next level of production and I’m sure the consultants of the big players are telling them just that.
The share prices reflect an exploration company not a mining company.