why CYM is a Billion $ company in the making, page-2012

Without taking the discussion too far off-topic, it is worth using OZL for industry comparison because they are a pure copper play
(with gold credits) and predominantly Australian production, albeit a predominantly underground operation now at least until they start open pit mining nickel & copper at West Musgrave a few years down the track at least. Clearly from the data its the cash costs that are increasing due to production issues caused by labor, breakdowns and weather. If you look at the figures the difference between C1 and ASIC has remained steady at between 60-70c/lb over the past twelve months.

Debt doesn't come into the figures because at the end of the quarter they were only carrying $25m debt. Not the $260m debt plus additional potential $50m debt that CYM are committing to. That said they do have a $700m facility that they will be drawing down for capital investment.

Depreciation is another matter. This is the problem with underground mining. Costs are often capitalised on the balance sheet and there is always ongoing capital costs as the underground operations are expanded but are they really capital costs or operational costs? It looks like they are also applying a capital depreciation charge against the open pit ore stockpile as they draw it down. I don't understand how that works but assume that it is all accounting magic that has allowed them to capitalise the cost of mining that ore in previous periods. That would be like us booking the existing heap leach ore as an asset on the balance sheet which AFAIK we haven't done and then depreciating the asset as we draw it down. That all said, their upper end guidance for depreciation represents about 17% of forecast revenue (I'm using analyst forecast for revenue).