RATPATROL You are FIRED!! RATPATROL If you are trying to dazzzle us with your stupidy it isn't working. Not sure what your background or education level is but as a financial analyst or banker you are totally clueless.
For your benefit
Finance for Dummies101
1. PEAs are not worth a plugged nickel. Only FS matter.
2. The numbers you quote for initial capital cost are false and misleading.
3. NPV is what matters. Not payback period. Payback period ignores cash flows after capital paid back
Using Bluestone PEA's from 2017 - estimating an Underground operation,
And from 2021, estimating an Open Pit operation,
I'll try to unlock some of the confusion surrounding this company and this property.
Why are you be comparing the 2017 PEA with the 2021 PEA? PEAs aren't worth a plugged nickel. The 2017 PEA was preliminary in nature, extremely speculative and was based solely on information from the previous owners. A geologist hadn't been on site in the prior 5 years. The more relevant comparison is the final 2019 Feasibility numbers for the UG operation incorporating the latest infill drilling at the time to the 2021 PEA for the open pit. That is all we have at the moment. Once we have the feasibility study completed for the open pit then you can compare the two feasibility studies.
2017 PEA NPV after tax for underground $317M
2019 FS NPV after tax for underground $241M Almost an $80M difference between PEA and FS for the UG operation
Shows why bankers don't give money based on PEAs. Only on FS. That is why they call feasibility studies bankable because you can take them to the bank. NOT PEAs.
1) U/G Project 2017 ($1250 / oz gold price)
Plan was to SELECTIVELY mine the orebody using adits, drifts, and raises for ventilation, etc.
Cutoff grade was 3.75 grams per tonne of ore mined.
Where miners encountered fractures,
the drifts might be supported by back-filling the cavity with waste rock.
Capital Cost was estimated at $93 million. Why do you continue to lie and make up false numbers. The initial capital cost in the 2017 PEA was $170.8M and the final feasibility number was $196M. Not $93 million.
At $1250/oz the PAYBACK was about 15 months. PAYBACK in the PEA was 1.8 years and in the FS 2.1 years. Not 15 months
Experienced miners furloughed from Goldcorp's Marlin Mine (about 250 km away)
Could have been relocated.
OBSERVATIONS
1) If I were a banker in 2017, I would have LOANED $93 million, That is why you would be fired. Bankers don't lend based on PEA numbers, They lend based on FS numbers. In this case the capital required for the UG operation was not $93 million but closer to $196M. Try to be factual for a change.
Recognising that mine plans evolve with time and knowledge of the orebody.
BUT WE ARE MAKING MONEY ALL THE WHILE!!!!
THAT DIDN'T HAPPEN!
What happened was NO MONEY was being made while Bluestone used public funds
To drill more of the orebody.
And we all find out......
If I were a banker, I would compare the outlays and payback periods Quite obvious that you are not a banker or have any financial skills. Bankers don't use payback period for assessing project viability. Instead they use NPV and discounted cash flow. Payback period does not take into account time value of money and excludes cash flows once capital paid back.
If I give you $1000 and the 2 options are
a) you can repay me $500 a month over the next 3 months (payback to me is 2 months)
b) you can repay me $250 over the next 20 months. (payback period to me is 4 months).
Option (a) has the quickest payback period but totally ignoes the fact I am getting $250 beyond the payback period for another 16 months in option b. Option B based on NPV would be the preferred option.
With Cerro Blanco the NPV has tripled with the open pit operation compared to the UG operation. That is what is relevant. From $300M to $907M