There’s no requirement for them to kick off production today. They can sit on it for 2 years as Degrussa winds up, do the necessary studies, exploration and capital development then attack it around 2022 as Degrussa comes off and as the Cu supply gap opens up. If they’re bullish Cu and have the workforce to extract the Cu economically then I can’t see how this is not attractive to them. Wait 2 years and Degrussa runs dry and they lose their workforce who don’t want to relocate to Bosnia or Botswana.
Taking this approach they could potentially buy it for say $50m - being $20m upfront, $20m on first production and 0.5% NSR. Then they’ve insured themselves against this thing never becoming operational. What’s $20m cash to SFR and a measley $10m pa in C&M? They may even be able to utilise the equipment on take or pay at their WA operations.
You’d have to think these guys would back themselves to make it economic given the resources and infrastructure that exist (plus exploration upside).
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