I want to apologize to the board for my previous post. In my hastiness to provide a rebuttal to some of the posts SH regarding Liberty's ability to repay J.J., I used some outdated information which led me to some false assumptions.
I have since read the NI43-101 and have used SRK's model to create the following spreadsheet. I used their NSR COG calculations (Table 22) and replicated their results, I then created an excel function which accepts the zone type and ore grade to obtain the margin per tonne of ore.
This enabled me to use the Mineral Reserves (Table 24 ore grades) to calculate the NSR for each stope, replicating SRK's results for verification. This provides the flexibility to calculate the Net Smelter Revenue using the production schedule (Table 29) and have the ability to easily change parameters such as LME metal prices.
If you look at table 24 you will see that the Total Stope Net Revenue equals the spreadsheet first row cumulative total (2011 Q3) when using the NI43-101 parameters for nickel, copper and cobalt.
The highlighted rows are using the current metal prices.
My post on SH includes my spreadsheet, again because of the inability to post tabular data.
If you look at Table 22 you will see that they used different cut off grades for each zone
(Pit 0.25%, SLC/BH 0.54%, CF 0.63%)
As you can see; they are targeting the higher grade (1.91%) Cut and Fill lower zone first from 2009 Q4 to 2010 Q4.
The middle zone and grade (0.68%) SubLevel Caving/Blast Hole will be mined over the 2yr LoM and the open Pit zone (0.33%) will be exploited from March-October 2010.
In my previous post I used an average for the cost per tonne of $62.00 and a Net Smelter percentage of 72.6. The estimated cost for the open pit is $25.61 and $56.96 for the SubLevel Caving, this along with a calculated SRK Net Smelter percentage of 81.04% makes mining the lower grades economical. One thing I should point out is that I'm questioning SRK's calculation of Xstrata's Ni and Cu participation and MgO Penalty calculations. If anyone could valid their numbers in table 22 and fill me in, I would very much appreciated it, thanks.
The other major point; if metal prices remain at the current level we will generate 10.5M $Can in cash flow by the end of June 30, 2010. Which should be adequate to repay the J.J. loan due July 2010.
At the bottom of the spreadsheet the tpd (tonnes/day) indicate that there will be plenty of milling capacity to handle as much of Redstone's ore as they can bring to surface for the next six months. This could easily generate an equal amount of revenue @ 250tpd of 2.2% ore without having to use the third ball mill until Q3 2010.
So my concerns about the Hart project timelines are lessened, although I still hope that they are not complacent and make sure that all permits are obtained promptly.
Enjoy.
Sincerely
BubaBob
