RE:RE:RE:RE:RE:43-101HighROI wrote: Ocotillo,
Let's say there is a magic number the likes of a
Cameco wants to see before making an offer (300m pounds
for arguments sake). If they reach that number and the deposit
is still open would capturing the upside not outweigh
additional drilling savings? Do you feel mine development
could be fast tracked at this point or is there not enough drilling
done to date for environmental studies, mine plan etc?
I would think from a risk / reward perspective a move sooner than
later would make more sense.
It is very important to have a better handle on size and grade distribution in all the zones, as development plans should right size initial production rates, optimize mining sequence, take into consideration potential brown fields expansion with growing demand for uranium, and build into planning for mill and tailings.
What is absolutely fundamental here is that a green fields development of Arrow will surely be lower cost than any brown fields expansion at difficult mining situations like Cigar or McArthur, IF they are even economically feasible, AND ongoing mining/production costs at Arrow will be lower with higher margins/lb (mining costs at Cigar are about $7,000/tonne after multi $billion development costs).
Not only are McArthur and Cigar problematic from ongoing cost and engineering perspectives, but are also the core of Cameco's and Areva's reserves. Make no mistake-Arrow should be considered as a must have deposit to save Cameco's bacon......regarding Areva, it is true the company is essentially bankrupt, however, Areva is majority owned by the French gov't, so if Arrow was considered to be a strategic asset important to the security of France's nuclear power for the next 3-5 decades or more, I have no doubt the French gov't could easily recapitalize their balance sheet, or do what is necessary to facilitate Areva's acquisition or participation in whole or part. As for Rio Tinto or BHP, they both have large enough balance sheets that either can easily handle transactions under $5 billion........how NXE's future will unfold is anyone's guess, but however it does, it will be very interesting:-)