Napkin Maths and Regulators, Shareholders RequirementsNapkin math is good tool for a first look for evaluating a particular macro-economic situation and people, including myself, do that often. But as indicated in a previous post the inputs to the simple math model are crutial, since "garbage in garbage out", specially when a pre-conception would result in a favourable treatment of one side, and at the expense of the other.
Case in point, Ni versus Au for Beta Hunt. I am not against Ni since the grade at BH is quite good and if it can be retrieved at reasonable profit, then just don' t write it off, keep it there for the future. However, management has chosen Au, since some napkin math, and detailed cals with fancy models, would show them that the Au deposit based on the latest (Aug 2019) Tech Report is much more valuable than that for Ni (based on some historical information, which is not CIM or JORC compliant).
Compliance to the regulators (both Canadian and Australian) is a requirement. Company such as RNX must go through this routine (no exception). Besides, RNX shareholders and the market would want to see that too. A potential suitor must be able to show their shareholders that RNX has the goods for the price that the suitor is prepared to pay. For Au, they have the Technical Report based on historical data plus the latest drill results from the 40,000 m - 5000m (for exploration drilling). However, they would still need to get the mine plan together as part of their requirements, before mining based on the proposal could begin. So, there are many hoops NRX must jump through, but for Au they are almost there,
But for Ni, there is not much preparation, with the exception of the historial resource as of 2016, and they have been extracting Ni for many year depleting the historical resource, as discussed in previous posts.
This is just a warning that assumptions for napkin math must be supported by solid facts, not just by speculations that more stuff could be found later by further drilling. This may be possible but the regulators would tell the company "show it".
As indicated, I am not closing the door on Ni on both BH and Dumont. But, if there is a complelling case for Ni, I would suggest that rather than calling management incompetent, the supporters for Ni should contact management (Paul Huet himself) to present the case.
If mangement refused to change its mind, then perhaps it's time to sell the stocks and move on. Why waste the time here.
GH11
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