Advanced Explorations Inc. ADEXF

RE: RE: The 2011 Drilling Program

[greenandgold]

I understand your basic point that 323 million tonnes is enough for a start-up operation. But not drilling up a resource goes against basic industry practice and directly affects the net present value of the project, which the feasibility study determines. The feasibility study will not use your ad hoc math, its calculations will be very conservative and highly discounted for risk.
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The cost of drilling up the resource is so small ($8 million of infill drilling should get Roche Bay to 750 million tonnes indicated or beyond) compared to the cost of building the mine (at least a billion and probably more) it doesn't make sense to save money at the drilling stage. Having 323 million tonnes versus having 750 million tonnes of resource drastically changes the calculation of net present value of the mine.
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They haven't received the money from XinXing yet. That's why they haven't been drilling with 3 drill rigs all summer at Roche Bay. It's the only logical explanation--no sane company management would purposefully not drill up a resource when it's at its present modest size.