Carbine misfires on development

CARBINE Resources’ brutal honesty about a rise in costs for its proposed Mount Morgan project in Queensland from A$549 to $862 per ounce has seen the junior’s shares savaged almost 60% this morning as the dream of production from the historical project slips away.

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A mix of higher costs to the tune of $313/oz, reduced income and a relatively high pre-production capital cost of $87 million means the project no longer stacks up, and Carbine says Mount Morgan’s key stakeholders need to improve the terms of their agreements to make it viable, or the project is a non-starter.

Carbine has minimised project expenditure while it holds discussions with its stakeholders “in a final attempt to improve the agreement terms and operating conditions to secure project funding”.

While the AISC are not terrible, particularly compared to some Western Australian gold mines, they represent a dramatic escalation of almost 60% since the feasibility study was completed on the complex project in December 2016.

Carbine blamed higher cyanide consumption...