RE:RE:Released S-K 1300 Technical Report Summary on KHM
Yes it was a big read but I liked the Mining Plus Canada Ltd. report. I thought it was well put together. The previous technical report was also an eye opener and just as long.
The following are just my comments on HKHM and it no way indicates anything in regards overall Hecla profit/loss or SH value.
You caught "All deposits are characterized by high grades, narrow vein widths, and challenging ground conditions." That definitely describes Keno Hill.
I think I remember recent AKHM promoters talking about “The Deep, etc.” like was almost like a big lump of silver waiting to be high graded and hand cobbed when in fact the drill results did not appear to indicate this. I was floored…
It will be interesting how the Hecla GC management handle the current HKHM issues and the P&L situation after a full 2024 production.
I may mention that Husky and the HuskySW mines have long been suspected (prior to AXU) of having additional higher mineralization deeper and further towards Mt Haldane/MMG. Quite possibly this is all part of the Silver King camp? I can imagine the workings are now filled with the always present water.
I would not be surprised that the Mt Haldane play may have many the same issues, but suspected reserves may create additional Hecla interest, especially if Hecla can get KHM under control and profitable.
Your comment “The next maybe 7 years were spent roughly doubling throughput mill capacity to 450tpd (but not feed?) and waiting for higher Ag prices”. Judging by the Alexco sale this was a problem and that it certainly could be an issue short term for Hecla. Hint: Current Hecla NPV chart Page 358. That said Hecla has a lot deeper pockets and a write down would not have the same impact.
Your comment “Alexco…” - “made money at high dollar silver” is exactly right, that’s what it takes .
Report Quote: “The NPV analysis indicates that the project value is most sensitive to the silver metal price, a ±10% variance in silver price resulted in a -29% and +21% variation in NPV. In addition, the project value is also highly sensitive to silver head grade. For a ±10% variance in Ag head grade, the project resulted in a -26% and +19% variation.
Amongst the selected parameters, project value is least sensitive to the exchange rate and capital cost.
The result for capital sensitivity is reflective of the low project capital requirements, leveraging the existing development and infrastructure (sunk cost). “
Alexco among many others found this out, this is an unforgiving area to mine profitably and making a big comeback for any company never really happened. So it appears the GC team need to come charging out of the gate in addtional to sorting out the environmental issues.
I am curious to see how Alexco responds to the March court appearance on environmental issues, as I remember it they are to clean up the workings not create new issues. If this doesn’t get addressed this play is really going to get interesting.
In regards “head grade” the charts showed the mines are going to mined sequentially with the deep taking the risk for the first 3 years” Hopefully that works, head grade has a big impact and with only one mine operational for the first three year there less chance to mix extracted ore. Hecla has big expectations of this mine Table 5-2, 5-3. I picked this one as it appears to be the immediate HKHM mine of interest.
I am curious to see how HKHM does financially in the coming year plus the additional requirements for water rights and waste management areas, the reclamation of new and old mines and any variables that crop up during the year especially the price of Ag.
Hecla has indicated they need new mines, a successful HKHM may offer an immediate 10/11 year window plus possible extensions.
Hopefully there are profits (plus dividends) and THAT this turns into a success story for HKHM.
Corrections on my errors and omissions are welcome.