Pre-feasibility modification ... .... you have to ponder what exactly would fit the categoty of potential modification requirement.
Jay Taylor asks about further exploration ... Larry outlines the resource to date ... Taylor says ... well you don't need to do anything there.
Think about that for a second. What is the single most biggest mistake a company can do when commissioning a pre-feasibility study ... I would suggest it is going into the process with a mediocre resource base ... mine life and mine paybak in the context of all financial metrics involved with production scenarios just leaves to much risk on the table. Even if profitability is shown in the latter years ... those latter years are too short to give comfort in risk assessment of cost pressures that may develop over time.
Well ... resource is not a problem at all with Artillery Peak.
As I stated before ... Kemetco process isn't in question either ... it worked. Kemetco would certainly have given the company upscale modelling of the test plant in real terms. Investors may not have seen internal documents pertaining to that ... but I'm sure they exist.
OK ... process will not be open to revision.
Flowsheet and Mine Plan ... with Tetra Tech designing both those components to the production specifications targeted ... can't see any modification there either ... and those components have been deemed 'final draft' already (can't emphasize that enough).
When you look at the whole picture ... I just can't see any part of the pre-feasibilty study that will require the company going back to do more work in any of the areas mentioned.
Management will be looking at the whole report ... analyzing projected IRR and the like ... and mappng out the go forward from there.
So the question really falls on the difference in PEA projections from awhile ago ... to the pre-feasibilty projections of today.
I guess you ask yourself ... what kind of IRR did the PEA point to ... how rising costs in the interim will impact those numbers ... boiled all down ... will that IRR projection make it a straight forward decision to go forward. Margins were quite high in the PEA ... alot of room there.
So ... what are you expecting ... what is the minimum go forward number?
I believe the number comes back stronger than the pessimist might think.
Going back to Taylors interview ... he was clear ... resource was not an issue ... and we know process is not an issue. Here's the biggie though when considering if rising costs will be a significant issue and Taylor was made aware of that as well (as if he didn't know already when he made his 'buy' recommendation only days before) ... the process proved recoveries much higher than were expected.
So take that into consideration ... yes ... rising costs to some degree ... and yes ... higher metal recoveries to a significant degree ... do they offset each other to some degree or high degree when it comes to PEA outcome projections and what we ultimatley see in the PFS ... that seems like a pretty safe bet ... yes ... there is an offset there.
OK ... how much offset ... well ... that offset seems to be masked in Larry's response to Taylor ... he says ... let's not kid ourselves .. costs globally have gone up and we will be impacted like everyone else ... however ... he says ... the expectation is still for robust projections.
Offsetting criteria ... yes ... I think 'robust' will still be the buzz.