We can generate positive cash flow at $10/lb, but I doubt we can be profitable at that price for nickel at 1,500tpd. Include our exploration/development recovery expenses and our administrative/general expenses and $10/lb would produce a loss even at full production. Our recovery costs for Redstone and McWatters will land around $4/lb, G&A will be around $2+/lb at full production. If we can manage to actually hit $3.50/lb for production costs, we might manage to break even at $10/lb. We really need nickel to be $12+ to pull out some nice profits.

The positive cash would be important to keep us operating even in a loss situation, but we would just be returning cash that we invested in exploration/development and not recovering 100% of that cash we put in. If the deposits at Hart are large enough, it should cut down the average exploration/development cost and reduce our overall cost to produce a tonne of nickel from Hart.

There is some considerable uncertainty on what nickel prices will do in the next 12 months... and this will play heavily on whether we are successful or not with our operations.