Some Thoughts to ConsiderThere is certainly an emerging district in the Patterson Lake area. I don't think anyone would argue with that. At the end of the day though business decisions will be made on the best allocation of capital and if you actually think about it there is no need for NXE to cooperate with anyone to get Arrow built. I am here to make money and make the correct decision.
1) NXE is almost certainly going to have enough hg extremley valuable ore to produce for 10 years at a rate of 25m pounds per year which is more than any mill in the basin currently processes.
- why would you share mill capacity when you have the most valuable rock in the SW basin and enough of it for ten years at a very high rate of production?
- from an NPV point of view it would be detrimental to Arrow to give up production to other deposits and discount the value of any ore that could be processed in that 10 year time frame to 0.
- the value of the HG ore alone in the HG shear will pay for the capex in under 2 years. There is absolutely no reason to share risk or share a mill to dilute the economics of Arrow.
2) Arrow is large enough to support it's own mill and the only deposit large enough in the district to support it's own mill
- ever wonder why Leigh always refers to Arrow as strategic? He who controls the mill controls the SW Basin.
3) Mill location will be driven by two things: 1) Close to Arrow as possible and 2) Driven by Civil Engineering. Noone is going to place the mill closest to a potential open pit operation or closest to a highway. Those are NOT drivers.
- Driver 1 will be moving the ore the shortest distance from where the most ore resides to the mill
- Driver 2 will be building the mill in a location that can support the massive foundations that will support the mill and equipment. So they are going to have to find an area with bedrock below or an area with the bedrock shallow enough to pile into soil / till. The foundations will be massive to support the weight of the equipment and forces on the anchor bolts.
4) Has anyone heard of any cooperation going on to share capital and risk? Even a slight whisper? NO. Anyone called NXE management to see if there is any arrangement with the other players to mine any open pit locations first for tailings disposal?
- NXE is currently working on a PFS which will form the basis of a permit. Once that application is made the location of the mill is locked, the strategy of tailings management is locked and your mine plan is locked. It will take years to get that approved and any deviations to that essentially causes the clock to reset. So I ask if noone has heard a whisper of shared risk strategy then the logical answer is there is no shared risk strategy and as I have argued earlier no need for one.
- Sure someone could take over NXE who hold all the keys and change this but again this points to why would they employ a different strategy if the business case says there is no need for one? For a suitor or consortium to employ a risked strategy across the deposits they would first have to take out NXE. I am not sure how you make the investment case of investing in other players on the hope of NXE getting taken out. Seems very backwards to me.
3) Mining the 840W and 600W Zones will require a dyke even though they are in the basement as the water charged surrounding mess will leak down into the open pit operations and the open pit will be below the water table.
- wireframe22 I suggest you get in touch with ocotilloredux at ceo.ca to discuss the mining of the 840W and 600W and the harpoon / spitfire areas. He is an excellent source of info and I think you will find you are on the wrong track. He agrees with you that subsurface tailings deposition is the way to go and I think that is where you will find the agreement ends there.
- what about the cluff lake abondoned mine for tailings disposal?
- is a tailings pit going to cost more than $400m? That is the current value proposition + a takeover premium if FCUs pits were what some claim they are if a consortium wanted access to these pits if they were even mineable. Given my previous argument no ore is necessary outside of Arrow, FCU does not bring anything to the table.
Yes there is a district emerging. Is everyone going to have an equal seat at the table? Nope. Is everyone even going to have a seat at the table? Very unlikely. I think you are telling yourselves a lie if you think this is going to play out like some Quakesian dream.