Increased resource at slightly higher grades is great news and size has likely surpassed expectations.  In their presentation they talk about staging production in two separate phases beginning with oxides for lower capex and op costs relative to the initial design in the PEA.  However, in the PR the engineering firm included a table utilizing updated cost analysis of similar West African mines to determine the resource.  In 2010 SRK estimated oxide costs of mining $1.10/t, processing $6.67/t, and G&A $1.55/t for $9.32/t total but in 2012 GMS estimates oxide costs of mining $1.90/t, processing $7.21/t, and G&A $3.84/t for $12.95/t toal.


I do not see how management can reduce op costs with the current inflationary numbers relative to PEA.  The bright side is that oxides now exceed 1.7M oz and at 150K oz annual production can be deemed long life and capex will likely be much lower for phase one and more manageable.  I do not see how Orezone can/will go about building an oxide mine on its own in the present environment so the likely option is the sale of the asset/company again.  Only issue that sucks is again they are forced to do so at near the bottom of the current gold cycle.