Voltalia Ord Shs VLTAF

RE: RE: Changing Mentality for Catalysts

[eebler]

Just in the general sense.  The use of trailing averages helps offset use of current spot prices, they almost always base capex on buying everything brand new versus used or leasing it.  They typically size things out to their ideal production scenario, and then revisit whether it is too much as part of optimization studies.  There are also conservative assumptions built in based on the mine plan, where they have used the average g/t, but for me that is the main thing they can influence where a tradeoff in quantity can be influenced by an increase in the grade, and that is directly in the control of their mine planner.  The assumption for now is avg grade throughput, whereas higher grade immediately changes the payback period.  A 10% improvement in head-grades translates into an additional 35k ozs per year ($52m more cashflow at $1500/oz) with virtually no incremental cost (chemical consumption goes up a bit).