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9/26/12

Even more Sulliden (SUE.to)

I got to thinking about what Sulliden had guided the market to expect from this feasibility study, so started checking back on reports and things. Here's a fun interview done by Peter Tagliamonte with BN Americas, dated 5th November 2010 and here's an extract (translated) from the Q&A:

BNamericas: Regarding the feasibility study, what are the objectives?
Tagliamonte: We received a scoping study or PEA prepared by AMEC in December of last year that was based on the resource that dates back to 2004, so it is preliminary data but it confirmed that it is a very solid project with a production profile of around 105,000oz per year of gold equivalent. From that time, we have been enjoying good success with exploration on the property so for the bankable feasibility study we're aiming for a target of 155,000 oz per year over a 10 year mine life. 
BNamericas: What are the investment parameters of the project? 
Tagliamonte: The PEA estimated investment around $90m and we believe that capex will probably increase by 35% based on a larger mill, processing facility and equipment, because now we'll go from a production schedule of 105,000oz to 155,000oz. 
However, the resource will keep increasing, so I think that the 155,000oz per year will be an initial volume. It's difficult to give an exact number, but really I think that it will be between 155,000 and 200,000 oz per year, probably closer to that last number. 
BNamericas: Will you be concentrating on permitting next year? 
Tagliamonte: We are now gathering data for the environmental impact study and this will be part of the permitting paperwork. We hope to submit the application to the government at the beginning or middle of next year. On receipt of a positive answer, we'd like to start construction and have the mine in operation by the middle or end of 2012.  
IKN back, so let's see now: In late 2010 the plan already envisaged a mine that would produce 105,000oz/annum over ten years, but Tagliamonte said the objective would be to build a mine that would crank out 155,000oz minimum and probably closer to 200,000oz. The price for this would be 135% of $90m, i.e. $121.5m. Not only that, but SUE.to was gathering the data for the environmental impact study at that time, it would be submitting for its permits in mid-2011 and would be in operation by the end of 2012.

Instead, we have this:

  • A feasibility study for a mine that doesn't even make 88,000oz/annum
  • Capex of $131.8m without all that extra machinery for all those extra ounces
  • Add to the capex item the $8.5m working cap and initial fills needed, plus the mere trifling of $47.8m in Life of Mine sustaining capital (translation = we'll build the tailings dam to the right size when we have enough money) and all of that pre-VAT (roughly speaking, sales tax)
  • No environmental impact study submission, even though all that data was being gathered way back then
  • As for having the mine operation by the middle or end of 2012....well, take a look for yourself.


As they say round these parts, pez por la boca muere. But of course, we must trust junior mining CEOs such as Peter Tagliamonte because they always tell the truth and never try to hoodwink anyone or try to exaggerate their companies' prowess. Or maybe this applies (ty reader 'J', fine person that you are):