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Jbay76 (< 20)

Positive PEA for RBY and F2 project

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June 29, 2011 – Comments (6) | RELATED TICKERS: RBY , GOLD

RBY just released the results from it's preliminary economic analysis for the F2 project that it owns 100% and the results look pretty good.  A quick synopsis here, though you should really click on the link to get the poop on the scoop...

"The PEA is a very good start. It indicates that the F2 Gold System is a potentially viable project capable of producing a steady state average of 180,000 ounces of gold per year and over 200,000 ounces ( cash cost of ~200/oz, emphasis mine) at its peak using conventional mining and processing techniques with an initial capital investment of $214 million. The use of a 30% contingency on capital costs represents a reasonably conservative approach which recognizes the reality of cost escalation in the industry. We are also pleased to have been able to convert a significant portion of resources to the Indicated category. The deposit remains open in all directions and the PEA outlines a number of areas for potential future optimization. Management considers the range of results presented by AMC to be largely consistent with our most recent (March 31, 2011) resource estimates with the important difference of the conversion of some previously categorized Inferred Resources to a significant Indicated Resource component in the new AMC estimates," stated David Adamson, President and CEO."

"It should be noted that, in determining the mining inventory, AMC decided to take a conservative mine planning approach in applying the average diluted resource grade to the bottom five mining horizons (bottom 305 metres of the resource) rather than use the modelled average grade of 33.8 g/t, thus reducing the total ounces on these levels. "

In other words, the reality is that production, and therefore revenue generation, can be a lot better than what is being reported here :D

6 Comments – Post Your Own

#1) On June 29, 2011 at 10:51 AM, 123spot (< 20) wrote:

Then why is the stock down 16% jbay? Were investors expecting more? Any insight appreciated. Thanks for the above . Spot

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#2) On June 29, 2011 at 11:34 AM, GoodDiggins (< 20) wrote:

the g/ton numbers on the ore samples are way down from what was priced in. Suffering from a credibility gap too

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#3) On June 29, 2011 at 1:01 PM, Jbay76 (< 20) wrote:

I do not think it's a credibility gap.  The company hired to do the PEA admits that they were conservative in what numbers they used to complete the report.  Maybe this is so that they do not have to resubmit the PEA the way they had to resubmit the NI-43101 earlier in the year due to the model used originally.

They are down 16% right now as I write this, so maybe it is?

Nonetheless, the numbers generated in the report state that in current conditions, the mine will pay itself off in 2 years, and their cash cost of $200 is remakably low, meaning they will be generating quite a profit.  In fact, in current markets, they'll be generating 1300/oz...not shabby

I'm not going to back the truck up on this one right now, largely becuase I have other compnaies I want to invest in, but neither am I giving up on this company.  

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#4) On June 30, 2011 at 3:44 PM, XMFSinchiruna (27.75) wrote:

Jbay76

That's $200/ton of ore, not per ounce of gold.

Article should be out any minute.

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#5) On June 30, 2011 at 4:01 PM, XMFSinchiruna (27.75) wrote:

Great Expectations for Rubicon Minerals

http://www.fool.com/investing/general/2011/06/30/great-expectations-for-rubicon-minerals.aspx

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#6) On July 01, 2011 at 8:56 AM, Jbay76 (< 20) wrote:

#4) On June 30, 2011 at 3:44 PM, TMFSinchiruna (98.86) wrote:

Jbay76

That's $200/ton of ore, not per ounce of gold.

Article should be out any minute.

 

Oh... that's quite a mis-understanding on my part. That seems very expensive given what has spoken about during your micro-cap reviews.

 

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