King River Resources Ltd T.KRR.W

Comparing gold to nickel production

[Farquar]

In order for Krr to produce 1 ounce of gold they need to run about 11.92 tonnes of 2.6 g/t net ore ( 2.8 g/t x 93% recovery) through the mill . The sale of 1 ounce gold = 1725$US.....Each ton of those 11.92 tons costs about 83.89$ AISC or about 1000$ AISC/ounce. .....Now let's look at nickel production per 11.92 tonnes of 4% nickel ore... 11.92 tonnes x 4% net= 476.8 kgs of nickel x 18.626$US /kg = $ 8880.88 US gross sales....So, as we can see, the amount of gross revenues that are created by nickel per ton is roughly 5X greater than processing 1 tonne of gold ore . The AISC for nickel is higher but I think it's reasonable to assume that the manpower-diesel fuel- trucks- extractors- explosives etc. to extract and move 11.82 tonnes of rock is very similar whether that rock contains nickel or it contains gold.. When we compare Beta Hunt to Dumont , we see that the Dumont has .27% nickel/tonne..So in order for Dumont to produce 8880.88$ of gross sales, they would need to process 14.81 times more ore. So 11.92 tons X 14.81 = 176.59 tonnes ...That's alot of rock to blast, extract and truck out to a mill...Speaking of Dumont, it's estimated that the Capex to get this deposit up and producing would cost an operator 2.8 billion$ ..Sure, dumont is the second largest nickel deposit in the world but at .27% nickel , it takes an awful lot of ore to make money with such low grades...If Dumont was such a slam dunk, then it would have been sold by now...Who's going to pay 1 billion$ to buy the deposit and then have to spend another 2.8 billion$ to get it producing? What if the price of nickel collapses in the next 5 years? It doesnt look like nickel price will drop too much anytime soon, but you never know...But, getting back to Krr's nickel situation, the big advantage for them is that they already have 100million$ worth of underground infrastructure built out and paid for already by previous operators(400 kms of roadways/tunnels underground) at Beta Hunt and because of that , it is significantly less expensive to extract that ore and they don't have to spend any money to build a nickel concentrator as they can contract ore processing with BHP.. .So, in conclusion, maybe they are building that second ramp at Beta Hunt to allow much more nickel production. Who knows? Maybe Krr management knows they have 100's of thousands of tonnes of high grade nickel and is secretly planning on significantly increasing nickel production in the next few months /years...If Krr ends up with similar amounts of nickel as Mincor, at similar or better grades, we are talking major profits from nickel production for years to come...