my calculations 1.67 per lb at avg grades, page-9

Proffreader
here goes

1. Do you believe this $1.72 figure ($1.67 + 5c as per P100's estimate for extra processing) is an accurate representation of copper costs if grades were at 1.5% based on the current ore processing costs, or are these calculations inaccurate, and if so what should the figure then be (and where did I err)?

Ans - Obviously I agree

2. Based on the fact the last 6 reports had grades from 1.43 - 1.72%, and this grade was only 1.08%, do you believe a 1 out of 7 grade is not indicative of the average grade and is more likely to be an abberration? (1 out of 7 folks)

Ans - Looks like a abberation but it is always possible it is not. The issue really is if the grade does not move back to 1.5% over the next 6 months then this means that the resource and mining plan are wrong. This would be a huge credibility issue and could rightly cause investors to say we just dont beleive anything this company says and sell out. The next quarterly should resolve this issue but dont expect a grade of 1.5% as the company has said they dont start mining high grade ore until may

3. If so, would you have been happy with a result of $1.72 cash costs, reduced from $2.37 from the previous quarter, especially considering the selling price of copper has risen, um, I will estimate 50c, since the last quarter? Some of this due to an increase in costs from the industry as a whole and especially Chile, producer of 40% of total CU. Take off 50c from both sides of the equation, sale price and cost price, and you are left with $1.22 cost price.

Ans - If the unit cost had been 1.72 in the march quarter the market would have been very happy as the trend was down. It did not happen so it is not relevent. If the cost for the current quarter is $1.72 then this would make the market very happy.

Ans -Yor selling price logic is not sound. You should not mix up costs and selling prices. The cost is the cost. The selling price is relevent when looking at margins and profits but not to costs.

4. Do you believe costs will decrease in the future due to a settling of operational activities now that ramping up has been completed, improved recovery rates, or any other factors?

Ans- Logically when you move from start up to steady state costs should reduce. Recoveries should also improve. It would be very disappointing if this did not happen

5. Would the tripling of production constitute management "actually doing something instead of just talking things up" at these costs and these profits per pound?

Ans - Dont understand the question

6. How about the quadrupling of production?

Ans - Dont understand the question

7. Do you believe open pit mining will occur, and if so do you believe there will be synergy leading to a further reduction of cash costs? Or will there be other cost cutting factors through an open pit mine? (No one answered me this in the other thread :( Might have to research it myself :( :( :( )

Ans - Open pit mining will happen as long as the enviromental approvals are received. This enviromental process is in process and should complete before year end.
The costs of ore extraction from mining open cut are much lower than underground however the ore grade of the open pit is lower so the overall effect depends on this trade off


8. What PE rating do you believe will be achieved once all of the following has been completed, on Project 4000 alone?

Ans - PE is not a meanifull measure at this stage. Most of the potential upside is in the exploration stage. If you were just trying to value the chile mine then maybe a EDITDA multiple of 4 may be fair

9. Do you believe the company has further upside potential aside from project 4000?

Ans - Huge upside, Project 3000/4000 is just the entre. Filipina grade is the big daddy, Armenia gold copper still holds a lot of potential. Portugal gold and Portugal Tungsten are good projects and probably another 1 or 2 copper projects in Chile. What is significant about several of these projects is that they are very well advanced and are all expected to develop into production centres. It will take 3 to 5 years for all of this to unfold and this is the reason I hold this stock.
Project 3000/4000 is a good project but you should only look at as a cash generator to fund the drilling,feasibilities and maybe some of the capital to get these other projects to production

I am not holding this stock to turn 12 cents into 20. I am looking for a long term price of at least $1