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Assuming I've got my maths correct:
100Mlbs = 45,350 tonnes Per year
15 years = 0.680M tonnes
If we end -up with 1.36M then that's double
Double of that $170M offer = $340M = £300M circa = 30p buy-out
Obviously that' s an oversimplification and I havnt taken into account Gold production.
But gives a loose indication of possible buy-out.
Obviously if we have more than 1.36M tonnes then...........
btw
Happy to be corrected on assumptions and maths.
I may have misunderstood something
plus a contingent payment of up to a maximum of US$60 million, consisting of up to US$30 million via a 10% sharing of net incremental revenue and up to US$30 million on a new copper resource discovered and declared within the acquired tenements.
Interesting to see methods for the seller to capitalise on additional discoveries. Very applicable to XTRs bushranger.
I think you are on the right lines Andrew. Seems to be as near to a reasonable comparison as any others we have seen I would think.
Certainly a lot smaller than BR in terms of tonnages but the deposit is an IOCG so slightly higher grades are reflected. It is proven to part measured/ indicate/ inferred and is at feasibility level to be an open pit with. Planning is subject to detailed plans and finance being sought. It’s accessible by air and road, with water and HVpower line too.
https://cumtn.com/operations/eva-copper-project/overview/
"Seems to be as near to a reasonable comparison as any others we have seen I would think."
Agreed. Possibly the most similar recent sale comparison I've seen?
"Interesting to see methods for the seller to capitalise on additional discoveries. Very applicable to XTRs bushranger."
Agreed. Very, very applicable !
Btw.
By my quick calcs, the additional Gold valuation for that sale only contributes to between 6% and 10% depending if you look at revenue or profit.
So for a more accurate copper v copper comparison, take a max of 10% off that sale - Obviously we may have some Gold valuation in our sale though.
Andrew, your calcs look right but note that the capex for the Harmony project is less than US$600m. For BR Mr Bird has already suggested it’s at least $1bn and likely a lot more. That’ll change the calculation quite significantly. Plus BR’s cash flows will be over a longer period and discounted more on average. Still, it’s a very encouraging comparator.
Hi IWTO, wouldn’t the economics and potential to return CapEx be far greater with the sheer scale of RC alone, which would proportionately increase due to increased size of operation, footprint, facilities and logistical requirements. It has more consistent grades in bulk. Higher grade early recovery phase that will see CapEx recovery from 4-8 years.
Eva is made up of 12 small deposits ranging from 0.7mt with the largest, little Eva, still being only 100mt. 7 of these are included in the current mine plan. Most deposits are IOCG with mineralisation being veined networks or breccias. Others are copper only stratabound type. So recovery of concentrates from these sulfide deposits can be easier to separate and can be more profitable, but nowhere near as abundant as more desirable porphyry deposits, which can be processed at lower cost making them very economical to mine.
These really are two completely different animals after all.
David and Goliath!
Capex, nearly double, no issue. Of course plant needs to be bigger, due to sheer volume to process.
At 87% Recovery rate about the same.
Basically Racecourse will return Capex and probably similar quantity of Cu/Ag to eva over the initial 6-8 years, rather than 15 years, from near surface higher grade material, it is unlikely we have pierced all the higher grade zones, or thickest areas of high grade within the deposit either.
I find following article interesting, though there are no specifics, it nicely debunks the grade is king philiosophy, when it comes to copper.
https://www.prnewswire.com/news-releases/why-the-global-economy-deems-copper-porphyry-as-one-of-the-worlds-most-valuable-deposit-types-301539259.html
Good find on the Harmony deal by Prof Cheese!
Andrew4444 your calculations were spit on for a first pass comparison.
I don't think a major would balk at a billion dollar capex at RC vs 600 million at Eva copper project when the contained copper at Racecourse is at least 2 times, and with possible further multiples once the porphyries at Ascot and possibly Footrot are added in. As someone mentioned, the payback is also faster.
Howezap, yes higher capex can be recovered more quickly from higher volumes of ore going through the plant. Only thing is, based on the last figures we saw, BR’s opex per lb of copper is much higher than Eva’s too. I admit I haven’t studied Eva in detail other than to note their cash costs per tonne seem very low. So I stand by what I said - the higher throughput at RC at higher opex would not compensate for the higher capex, in comparison with Eva. Of course it all depends on updated detailed costings so currently this is all IMHO.
Hi IWTO
Cheers, value your opinion, would agree with you that a more detailed costings update should or could improve the economics.
Pound for pound, one would assume in most instances the IOCG would be more profitable due to grade and easier to separate. But the reality of a far longer LOM for a porphyry deposit with more consistent grades in bulk make for easier mining, less ongoing plant modifications for different ore type and a long mining operation over decades that do ride out commodity cycles a lot easier.
Let’s just hope the numbers do stack up!