RE:Moving a "large portion" of the UZ resources...tony1969 wrote:
from inferred to M or I would be huge for the projects NPV. Here is a quote from the MD and A:" In Q1 2017, drilling continued in the Upper Zone at Cukaru Peki aimed at upgrading a large portion of the deposit from the category of inferred resource to either indicated or measured resource as part of an ongoing pre-feasibility study." I have always thought they would move some but not a large portion as stated here. They have 1.7 million tons M and I and 35 million inferred so moving a large portion of that 35 million to M and I would be HUGE even if it would obviously result in a lesser grade. This is why they keep saying that analysts are not coming close to realizing how valuable the UZ alone really is. Am I missing something? I can see this resource upgrade substantially increasing the roughly $1.5 billion NPV as only 1.7 million tons were used to get that figure. This is why they have spent $40 drilling the UZ in the past year. Will it be $2.5, $3 or $3.5 billion NPV by the time they release the PFS in Sept? Then we have the LZ for the future....
Sorry Tony, but for your education the infill drilling will move most of the inferred resource to Measured and Indicated, but the PEA's financial evaluation uses the resource from both categories in the analysis. There will be no added benefit to the NPV.
To convert resources to reserves the deposit needs to be adequately drilled (drill spacing to define the resources to a minimum M&I level), and then these resources need to demonstrate a financial return before they could be call a reserve.
A PFS also goes through a more rigorous financial assessment where banks and other investors will feel comfortable investing. This de-risks the project.