High ExpectationsPerhaps they're too high. When a positive PEA comes out, even good news is treated as insufficient, and share price tanks. One big takeaway from the PEA is that undiscounted cash flow is up 86% from $17.114 billion to $31.97 billion. That doesn't show up much in NPV8, because life of mine has increased to 44 years. Most of us may have passed by then, so from a time value of money perspective, we ran down the clock. Most, though not all, of the additional NPV 8 is due to the 50% increase in throughput from 8 Mtpa to 12 Mtpa. Another important factor is the drop in average head grade from $4.68% to 3.79%. I believe most of the increased cash flow is coming from streamlined operations, which allow for the profitable extraction of lower grades.
Like the news release states, this doesn't include drilling from Kakula West. Had that been available, results would have been a lot more dramatic. They took yesterday's news and improved on it quite a bit. That's why I would have preferred the new 12 Mtpa mine plan to arrive concurrent with the latest resource estimate. One solid punch may be more effective than a bunch of little jabs. It's not a criticism, just a suggestion.