RE:These guys are slick with press releases, bufordpusser you wrote: «a totally irrelevant purchase option agreement»
I disagree as very significant HGO option news - for a larger-scale Beta Hunt operation: «Higginsville Mill and Gold Mining Operations ("HGO") has been extended until May 12, 2019, to allow the parties additional time to settle definitive documentation and confirm the exercise of the option. The parties confirm that due diligence is substantially complete and they are progressing towards finalisation of the deal.
[…]
Mark Selby: «The combination of the Higginsville Mill with the production potential of our Beta Hunt mine is expected to provide significant synergies, including a 35% cost saving per tonne (or in excess of US$100/oz) versus our current toll milling arrangements." »
REPOST from May 6th 2019 as per https://ceo.ca/rnx?e6bcbc0b3637 : I believe RNC Minerals will exercise the HGO option if they prioritize accrued development and production and want to fast track their growth and profitability.
From @Lexcon as per https://ceo.ca/@soupy?50a0e412fc7c : «At the high end they will be 250-300k/yr production probably, which is at lower end of mid-tier. »
Also, from @Lexcon as per https://ceo.ca/rnx?ea7cb2443b3f «With just B-H they already were on a 100k/yr production pace and with the new mill and mine plan they should be up to 200k oz/yr within a year. »
HGO option - RNC Minerals will render a decision no later than tomorrow as per the April 1st 2019 RNX Short Form Prospectus https://cdn.ceo.ca/1ed0r72-SHORT%20FORM%20PROSPECTUS%20april%201st.pdf
A larger-scale Beta Hunt operation requires a high capacity mill, the following are elements to take into consideration:
«Use of Net Proceeds to Accomplish Business Objectives» as per the Short Form Prospectus April 1st 2019:
«With the $10.9 million of net proceeds from the Offering, the Company expects to have sufficient resources to achieve the related business objectives described above and below:
-Cost reduction / improvement in cash flow from operating activities. The acquisition of the Higginsville Operations (if the Higginsville Purchase Option is exercised), including a modern, low-cost 1.3 Mtpa gold mill would provide a significantly lower cost milling alternative for Beta Hunt. The Company expects that processing cost savings would be in excess of C$15 per tonne, or a 35% reduction (versus current third-party toll processing costs).
-Significant increase in mineral resource potential: The Company believes that the acquisition of the Higginsville Operations (if the Higginsville Purchase Option is exercised) would increase the mineral resource potential of its operations
-Larger-scale Beta Hunt operation: Further additional drilling and capital development in the A Zone, Western Flanks and other areas of the mine would provide the basis to expand, if supported by related drilling results and mine plan updates, the Beta Hunt resource and reserve, which, in turn, could support a larger-scale, lower-cost operation. Larger-scale Beta Hunt operation: Further additional drilling and capital development in the A Zone, Western Flanks and other areas of the mine would provide the basis to expand, if supported by related drilling results and mine plan updates, the Beta Hunt resource and reserve, which, in turn, could support a larger-scale, lower-cost operation. »
From my Mines and Money 2018 transcript https://ceo.ca/@pierreg01599501?d6953d1bb7c0:
Mark Selby: «We bought this mine because we believed there was these great big shear zones again four kilometres. You can fit two mines into that kind of a strike length that again can go for a kilometre deep. We have a five kilometer ramp system that's already there.
[…]
Right okay, so we've got three drills on site right now. We'll do the resource update Q2. Will look to re ramp up the lower grade production in the second half of next year and again, given the scale of the asset we know the ramp can do 3,000 tonnes a day. We've done that and so, with that kind of a volume and X we expect a grade to go up materially. We've got the potential for a mine to be 150,000 to 200,000 ounces and that's just on the first 2 kilometers. Then we have a whole series of other discoveries where we've got another two kilometers which can even add more production longer-term, that's the three plus years. So again, I think for investors now the stocks made a nice run but again if you step back and say okay, how many high-grade gold discoveries have there been made in very low risk jurisdictions like Western Australia and not only in a low risk jurisdiction but basically, sitting adjacent to 5 kilometres of mine infrastructure? So, as we find this resource, we're going to be able to bring it in production relatively quickly. »
@Geodan, a geologist wrote: «Beta Hunt is underground but a low cost ramp system underground that can make money at 3 grams. But an open pit 1.2 gram should be fine » as per https://ceo.ca/rnx?8a837dc6be5f.
@Geodan on Seeking Alpha March 28th 2019 about the Q4 2018 Results Conference Call:
«Call went fairly well. It was all private investors, no brokers/analysts.
They seem to have less cash than one would guess. So, being the nuggets could fetch maybe $10? million think they should get them sold quickly which seems to be their plan.
Marc did not deny in anyway that HGO can produce a $20 million a year cash production/savings for RNC with what they have said ($10 million mill savings for RNC and implied #s indicating $10 million profit from HGO mining per year). That is another $20 million per year for RNC from getting HGO for USD cost of $40 million. That is maybe most positive thing in CC, we apparently have got it for 2 Times cashflow, 5 times is considered very good.
If they had announced this a week ahead of time and held CC 3 hours later there would have been more questions and broker types. Maybe on purpose as it seems they are hot to trot to finalize the HGO deal and did not want to spend a lot of time on call. »
RNC Beta Hunt Strategy – 3 Phased Approach as per @Trust-me-2 and https://cdn.ceo.ca/1ea3ufn-20190326180809-sshunt-plan-praesi-dez-2017.jpg+
Westgold projected Plant Expansion to 2+mtpa as per https://www.westgold.com.au/wp-content/uploads/2018/08/Corporate-Update-Presentation-July-2018-Reduced-Size.pdf
In 2017 HGO Higginsville Plant up-grade (est A$15m) Upgrade crushing and grinding capacity to 1.8mtpa.
https://www.asx.com.au/asxpdf/20170331/pdf/43h6gvzkqcbqnz.pdf
Estimation: Plant Expansion to 2.0 mtpa = (2/1.8)*15 = A$16.67m or CAD $15.85m and if 3% cost increase per year, in 2019 = A$17.68m or CAD $16.81m.
Highest capacity likely 3560 processed tons per day @ 1.3 mtpa.
Highest capacity likely 5477 processed tons per day @ 2 mtpa.
From @Andrewski and his revised calculation following Mark Selby commenting Mill savings of 100$ oz Au or $15 per ton:
$100oz/$15 ton = 6.66 tons at $15 per ton to realize 100$ saving for an oz (6.666 X 15 = $100)
Oz = 31 gr./6.66 = 4.65 grams per ton
3500tpd x 365 days x 4.65g/t is 191,000 oz/year.
Mill savings = 191,000 oz * 100 = 19.1 M$ USD/year
@Lexcon wrote April 3rd 2019 about daily ore transportation to the mill: «@Trust-me-2 if it is 210t/train and they run 3 trains= 630 t / round. If we figure 4 hrs/round they could run 5 rounds/day (24 hr per day operation) that is a bit over 3kt/day»
@Nickeltrickle wrote April 3rd 2019 «No-one buys a mill on speculation» and I most certainly agree