CHN has made a breakthrough on metallurgical recovery rates that will enable both the small scale and large-scale development options for Gonneville to progress as concentrate only projects. The removal of the mixed hydroxide circuit should cut over A$500m of capex from the larger scale development option, and lower operating costs ~15-20%. The changes do reduce ultimate payability and recovery rates, however, this is more than offset by the reduced capex. We now see a pathway to a larger development at Gonneville and increase our base case from a 4mtpa high-grade open pit and underground to a staged expansion with just open pit mining initially at 4mtpa rising to 15mtpa over time. The material improvements in project economics significantly enhances the corporate appeal of the Gonneville project, and discussions with Mitsubishi Corporation are ongoing. We reiterate our SPEC BUY rating, upgrading our price target 18% to A$2.60 due to incorporating the larger scale staged development into our base case.
To access the full report please log in under the Research Portal at the bottom of this page.
Argonaut’s Research Portal allows you to access Argonaut’s wealth of Research, as well as view descriptions of the Morning Note, Companies covered and the Team.
If you would like to access our research please contact us to create an account.
