Degrey - the barely mentioned elephant in the refractory gold

[Hydrogen]

Degrey just undertook a large capital raise. But Beside the shocking strip 6:1 ratio: They also have the bogeyman of 30% refractory gold.

Now being honest, It’s an absolutely stonking, stinking metallurgical issue - barely mentioned in any of their documents (unsurprisingly, because IMO they have a slightly disingenuous management)

To build an operational mill Degrey has a massive ‘never before built on this scale, pressure oxide POX plant to construct and test.

No POX plant has ever been built in the history of mining on the scale proposed by Degrey. Further they are notoriously difficult to make work on much smaller scales.

https://www.metso.com/insights/blog/min ... treatment/

Degrey are however in control on their numbers. Hence their large market cap.

We know why our DFS hasn’t been released yet - because the hard reality was that didn’t suit NCMs objectives. Soon these shackles will be remove… and the future can be evaluated fully.

When it is, all will be revealed in tandem, I expect, with the funding scenario. We just don’t know what Shaun’s got planned because he hasn’t been able to reveal it.

Yet.

But I can tell you Degrey is 6-8 years away from gold production.

For the record: Our main complicating factor was the first 200 vertical meters of the decline. That’s behind us now.

Other than that, we have a magnetic circuit to construct. Pretty simple stuff. When will the market appreciate this reality - Greatland is 6months from first gold…?

Degrey is 6 years minimum.

[Hydrogen]

Malva suggests I am possibly incorrect with my view about Hemi here:

My point was Hemi is not a simple project - it's big and complicated... And information on the problems that lie ahead for Degrey's POx plant are clearly evident at closer inspection of their own documents.

Essentially IMO there is an implied contradiction about the amount of refractory gold present and how it can be processed at Hemi.

It’s possible that Degrey are trying to pull the wool a bit here - not out of character for Degreys management, imo. Neither was any of this lost on a recent podcast by the Money of Mine guys, who also dug into the issues with Degrey (public criticism that would lead to a law suit, if inaccurate) MoM also argued the size of the POX plant required at Hemi was an issue. Not only is it to be the biggest Pox plant in history -and that's therefore a challenge to build and commission - but, further, I think there's evidence that this POX plant proposed is in fact way to small.

The DeGrey DFS currently provides for a 10mt processing facility with an 800kt Pox plant:

If you dig around the details, their DFS outlines a 10 mt plant and 800kt Pox Plant - a highly complex bit of kit for gold ore processing - but there are also resource and reserve statements (below) suggesting HEMI is in total somewhere between 20-40% refractory gold. Thats a lot. Now to be fair - Refractory gold is usually higher grade, so while much more expensive to process, it can and does yield more gold balancing out some of the issues.

My issue of contention is that 20-40% is such a huge variance in range, that itself should set off alarm bells.

Even taking an average of around 30% refractory gold ; That obviously suggests to me a much larger POx plant would be required (assuming their refractory gold grade is broadly twice the gold concentration of the rest) it's evidently a significant CAPEX drag. DeGrey's own documents constantly refer to the 'scalability' of the POx plant, which itself suggests they are also fully aware - if not explicitly saying - er yeah "sorry chaps but this Pox plant - it's not going to be big enough" (even though it's already the biggest in history).

Of note, their DFS states a 10mt processing facility and an 800ktpa POX plant - so if on average 30% of your gold is refractory, then blatantly something doesn't add up here. One explanation could be that the gold grade in the refractory ores are say 3-5x greater than the rest... but that's not made clear IMO.

Looks to me as if they will need to at least double the capacity of the POx plant to around 1.5mt PA (or they will have to leave 50% of the refractory gold in tailings or alternative only mine half of it - IMO unlikely).

So perhaps, Like their recent somewhat fudged management options target’hurdle being met... someone is potentially playing fast and loose with the truth here?

No wonder their largest institutional holder, Jupiter Asset Management, has been steadily and consistently selling down their position for an extended period of time now.

[FuttBucker]

I didn't know what refractory gold was, so I went and googled it.

For any other late learners... It's gold ore where the gold is spread finely through the rock (like dust), which makes it harder to recover with the methods used for... Erm... the lumpier kind of gold ore. These usual methods require the soaking of the ore with sodium cyanide. The issue with this is that if a gold particle is completely sealed up in the rock, the cyanide doesn't get to it, and the gold is not recovered from the ore.

Refractory gold requires a pre treatment to improve recovery rates, and the POX process is heating the pulverised ore in a pressure cooker with a good source of oxygen. The non gold oxidises into easier to handle compounds, making gold recovery more efficient.

So overall, refractory gold requires an additional process. That process requires the heating of ore at elevated pressures in oxygen, which is not easy to do, and harder still at volume. This makes the processing cost per oz of refactory gold higher, reducing profit.

[Hydrogen]

Degrey now touts Underground concept

https://degreymining.com.au/wp-content/ ... 81_DEG.pdf

But where are the giant >120m+ and 87m intervals at >1.5g and 8-10g/t - ?

They aren’t there…. (But they are at Havieron).

Oh but they’ve got 16m at 1.8 from 600m and no copper - so I suppose they do at least have depth.

Someday they’ll get it.