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Hi, I've no clue what any of this means but any idea why the SP is dropping so much please?
LM, Smaller plays will have ridiculous IRRs for sure but not in this scale.
Jerry, that would be a nice article to roll-out in a defence document.
You are right I referred to that just because ppl seem to be anchored on that figure. But my figure is not based on that but more so based on the Mining Journal pdf and what other projects have achieved and achieve. So believe anything above 20% is amazing with this scale. Think Ecuador is a better jurisdiction than Mongolia. Equal to Argentina probably and Filo had 23% and is much smaller 3.5x smaller.
Addicknt, ha no worries. Let that be least of our problems.
Addicknt I think the previous case was also not received well because the entire plan was much bigger in scale etc. So think the input cost going higher (capex) means also output price (copper price) going higher means that we will remain ballpark at the same IRR level i.e. 23-25%. I also believe this project now will be deliverable and deliverability is not only subject to the capex but also the size of the project etc. I believe company is much more ready with Darryl to deliver.
J.Maria_Ibarra, apologies, I've mistakenly been referring to you as JML.
Those who are interested should listen to a Bloomberg interview with Jeff Currie of GS. I think its available as a podcast on Apple or Spotify. From yesterday.
Currie is suggesting that copper will be the tightest commodity ever seen. Points to the example of oil in the 2000s when it went up 7 fold. GS have an initial forecast of $15k, but the implication is for much, much higher.
JML, yes, I understood your point, but would point out that the market was not happy with the previous high costs and I'm sure the focus has been to drive them down. Of course, higher input costs will not have helped the case, but I fear we'll get plenty of flack if they haven't achieved significant savings.
Addicknt also just to clarify my point with the capex. Imagine you build a skyscraper 1000m tall. Capex is let's say 2bn. Then you decide to reduce the building to 500m, Your capex is not going to come down to 1bn. Will be probably 1.2-1.3Bn. And then imagine that input cost have increased by 25%. you are at 1.6-1.7bn capex. Also do not forget cost have gone up but also your output benefits form that as well i.e. copper price is higher means NPV is higher.
LM no way the IRR will be at above 30-35%. Also the PEA is irrelevant. So many things have changed. It doesn't make sense to be anchored at those figures. There is no project that has that kind of IRR with this size.
Don't think we will have wasted our money. My point is being that if the capex doesn't decrease it doesn't matter. What matter that we have a project that has an IRR >20%. That this project is a big project that despite the "high" capex will be a lower operational cost project than what most majors have.
Thought the numbers were solid enough whilst not setting the world on fire ..... with more to come?
"The assay results from holes 19-40 extend mineralisation potentially mineable by both open pit and underground bulk mining methods and suggest capacity for resource growth. Mineralisation remains open both along strike north and south, and at depth in the southeast," SolGold says.
JML, you make a fair point about capex, but I'm assuming that the employment of several consultancies whose task was to optimize capex and mining techniques will bear fruit. If it doesn't we'd appear to have wasted our money.
Addicknt my view is that (very high level) that the project ahs been reduced in size but the NPV won't reduce proportionally and at the same time spot copper price is much higher. That's why I believe we will see an NPV of $3-4Bn. At the same time I think the capex number will be high still, which will reduce the IRR slightly. The reason why I believe the capex will be higher is that the project is shrinking but cost usually are not shrinking in a linear fashion.
Musk has just bid 41bln to buy Twitter.. 41 billion to buy a little messaging app.... surely a few billion could be better spent here, ensuring a generational supply of copper for his bland looking vehicles..
JML, the IRR should be positively affected by the lower capex, but most significantly by the higher assumed commodity prices...at least I hope so!
I think the NPV will be between $3-4bn depending on the copper price assumed. IRR should be slightly lower vs the PEA which had 25%. SO expect IRR range of around 23-25%.
I'm going for 3.25bn. But I expect to see a much improved IRR.
Considerably cooled off now.
YOU COULD MAKE 10% BUY TIME IT GETS TO 2.30
a few hundred thousand share traded after a rise like this 25 to 40 just the m/m trying to get a few on shares on board the buyer might well have gone home for easter If you have any spare money left load up its cheaper than yesterday morning
Now at 37, but don't worry it always comes back up in the afternoon
40p is the new 25p.
We may dip to 37p or spike to 43p, but 40p is the new nexus prior to big news dropping. Looks like there may be some good day trading until then too. The trick is not to get scared - this was a rerate not a spike.
GLA
Morning Novice, good man. Thanks matey.
Have a good day.....don't go galavanting........lol.