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Intchains Group Ltd V.ICG


Primary Symbol: ICG

Intchains Group Ltd is a provider of integrated solutions consisting of computing application specific integrated circuit (ASIC) chip products for blockchain applications and a corporate holder of cryptocurrencies based on Ether (ETH). The Company utilizes a fabless business model and specializes in the front-end and back-end of Integrated circuit (IC) design, the two components of the IC product development chain. The Company’s products include computing ASIC chip products consisting of ASIC chips, computing equipment incorporating ASIC chips, ancillary software and hardware, the products are mainly used in the blockchain industry. The Company had built a technology platform named Xihe. The Company has developed hardware models and several systems under the Xihe Platform, including a factory production test system, an after-sales data system, a computing server system and a batch management system.


NDAQ:ICG - Post by User

Post by goldhunter11on Apr 24, 2017 9:25am
182 Views
Post# 26156305

Profit from a 50,000 tonne bulk sample

Profit from a 50,000 tonne bulk sampleIdleB, TomG and others have recentley posted on this topic. I would put in my 2-cent for a postulated scenario:
- 50,000 tonnes, 20 days @ 2500 tpd (would need 50 truck-load/day to feed the mill on a JIT basis)
- grade 9gpt
- PoG: C$1700
- contracted bulk extraction, toll milling cost 50% of PoG, leaving 50% profit = 1700/2 = $850/oz

The math:
50,000 x 9/31 = 14,500 ozAu after 20 days of toll milling
- Revenue = 14,500 x 1700 = $24.6M
- Profit (50%) = $12.3M
- Expenditure (50%) = $12.3M, for digging up the sample, transportation to mill and milling. Lower expenditure would of course generate better profit.

This expenditure looks reasonable and attractive/safe enough for the company, since it does not have to spend on any capex up front , on equipment, people to run the equipment and the cost of running Sigma Mill.

When fully operational with its own milling, the company would need to employ hundreds of workers (highly paid). For discussion purposes, say  300 people @ ~$75,000/yr = $25M/yr. You can scale this number up and down to your liking, but it would be big bucks, regardless, and would require a long-term commitment by the company (i.e. you cannot just hire people and let them go the next year or shorly after). So, my bet would be  for this bulk sample, even at 50,000 tonnes, the company would go for contract mining and toll milling... while deciding on which way to go for future operation.

There are a few options
- keep on going after the 50,000 tonnes and mining C1 and C2 using the exploration/production ramp, just to tease the potential suitors (profit of over 100,000ozAu/yr operation would be quite attractive using the numbers in their latest PEA, along with the potential upsides).
- get those "cementation people" to propose a scheme (along with the traditional shaft option) to extract the deeper stuff. If the cementation method is much more economically attractive then it would be a good incentive for G to step in (assuming G is keeping a sharp eye on this puppy).
GH
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