When 6+6 Becomes NecessaryFor the record, I don't believe the 6+6 mining scenario is some kind of PR stunt. Just the opposite. It's the best evidence we have that "Payable/Recovered Metal" has risen sharply over the past year. Here's why:
Let's assume Payable Metal has gone up 50%. The 4+4 scenario already has a LOM of 29 years. If you pile on another 50% ore, LOM increases to 44 years. From a time value of money perspective, or discounted cash flow, that is an unacceptably long period to realize profits.
If you increase throughput from 8 to 12 Mtpa, as in the 6+6 mine plan, then LOM remains the same at 29 years, a more acceptable timeframe. I think this is the reason a 6+6 scenario is being considered at this point. They don't have a choice. You need to scale your mine to the magnitude of the ore.
Yet implementation under real world conditions of the Congo may be difficult. But that doesn't mean the Company won't overcome those challenges in time. That's why I'm more in agreement with the $5.50 target from RBC and CIBC at this point.