Thursday, May 21, 2015

Sabina Release Feasability Study

A lot of people were waiting for this and it was, all in all, quite impressive.

I no longer hold a position in SBB, but have been in this stock a great number of times. I've held it for fundamental reasons, and I've traded its swings a while back when it was fairly predicatble around the$1 mark.

The stock was even yesterday on the news, but gained a bit today. I plan a decent entry as I was worried about cash costs in the northen environment, but I guess the high grade makes it quite economical.

Another note for those out of the loop, Rob Pease is no longer the CEO after a numer of years with the company. Stepping in is Bruce McLeod; the man who sold Mt Milligan to Thompson Creek Metals. below is a list of the basic highlights. You can read the release here.

-The Project could generate a post-tax IRR of 21.7% and net present value ("NPV") (at 5% discount rate) of $539 million

-The Project could generate Life Of Mine ("LOM") post-tax net cash flow of $914 million on gross revenues of $4.5 billion with a payback period of 2.2 years (from start of operations);

Processing rate of 6,000 tonnes per day ("tpd") could produce an average of ~346,000 oz Au per year (post commencement of commercial production)

-Average production of 413,000 oz Au in years 1 through 4;

-Majority of production from open pit;

Initial capital estimate of $695 million and sustaining capital estimate of $529 million (including closure);

-Total LOM cash cost estimate of US$535/oz Au (including third party royalties, refining and transport). LOM all-in sustaining cash cost estimates of US$671/ oz Au LOM (including sustaining capital);

-A total of 19.8 million tonnes of ore could be milled over 10 years with a LOM average grade of 5.70 grams per tonne ("g/t") Au and metallurgical recoveries of 93%;

-Base case assumptions of delivered diesel price of $0.94/L for power generation; and
Open Pit strip ratio of 7.2:1 over LOM.

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