RE:RE:Engineering study for a likely ore sorter future acquisitionNewfish,
Your methologogy is fine. Just wanted to add a few comments
- Waste rock: The 20% cited by Paul Huet is conservative based on what has been shown by info from various companies, including NOVO (just "up the road" doing quite a bit work on sorter at Egina, see their recent NR on 12 Nov 2019, link below.
https://www.novoresources.com/news-media/news/display/index.php?content_id=367
The waste rock could be significantly over 50%, and the cost of operating the sorter is minimal. Apparently, Sumitomo a huge Japanese group, NOVO JV partner for Egina has built and tested a moving sorter that Scoop up the stuff in the front end and would spit out the rejected (waste) rock in the back end and only keep the high grade stuff, nuggets on alluvial stuff.
So, by assuming a 50% rejection rate in a sensitivity "study", the pay-back time for the sorter could be reduced to 1 yr?.
- Front end modification: I was not sure what front end of the mill that would need modification, for $5M. A crusher would not cost that much, and presumably that would be part of the sorter package to get the ore in different sizes ($1M max?) and that would be done at BH. The mill may need some tuning for higher-grade ore coming from BH, but should not cost that much, unless we are talking about trying to increase the capacity from 100,000 oz/yr to say 150,000 oz/yr. But, the higher grade would give them more dore bars and could bring the production toward that goal without adding many pieces of equipment. Essentially, the milling cost of $29/tonne is the largest chunk. Sorting does not cost that much except for the initial cap investment of say less than ~$4M total including the crusher. Transportation at $7/tonne for half the tonnage from BH (over ~60km) is not a big deal 500,000 T x $7 = (assuming US)$3.5M, say ~C$4.3M (compared to the cost of milling of $29M to put through 1M tonne ore/year.
- There is no need for RNC to do any exhaustive study. Just talk to Quinton at NOVO or Uncle Eric. As one of NOVO major shareholder he knows a thing or two about sorter. He might even bankroll RNC for a sorter or two.
- Coarse gold: If they hit a few pockets with bonanza grade they might not need to sort them by machine. Sorting them and breaking the chunks by hand before sending them to the Mint...as shown in one picture on RNC website is just fine. The caption says: "best job in the world". Hope that the link below works . If not, a Google search/Image would lead to it...It came from Seeking Alpha.
https://www.google.com/search?q=royal+nickel,+breaking+gold+specimen+by+hand&client=firefox-b-d&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjrmbbR__jlAhUEQ60KHU_AC1YQ_AUoAnoECAsQBA&biw=1010&bih=475#imgrc=AzSur3-8wtcR8M:
GH11
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Newfish21 wrote: 2 500 000 (sorter cost) + 5 000 000 (mill modifications) = 7 500 000
$7 (shipping cost per ton) + $29 (mill per ton) = $36 saved per ton
$7 500 000 / $36 per ton = 208 334 tons to pay off sorter
208 334 tons = 20% waste rock, therefore
208 334 x 5 = 1 041 670 tons would need to be sent through sorter
1 041 670 / 45 000 tons per month = 23.15 months, or a little under 2 years.
Very conservatively, with numbers 'pulled from the top of Paul Huets head', the sorter would pay for itself at maximum two years time.
It doesn't take an engineering report to understand how accretive this purchase would be. $$$
It is also worth noting, ore sorter would produce less wear and tear on the mill, therefore there would be less breakdown/preventative maintenance, a longer mill life and even more dollars saved than as shown by this very simple, very conservative estimate.
Less than a week until we come close to the course gold target zone (based on our stoping scale estimates), GOOD LUCK all RNX. longs $$$