not too shabby eh!, page-62

Focussing on mining the supergene in the first 2 years :


Las Minerale supergene zone is 600 x 250 x 35 m = 5.25 million cubic metres

From the Bulk test report," the native copper orebody in the area drilled for the metallurgical test work has been determined from the recent resource upgrade assessment and represents 24% of the total orebody in this area of Las Minerale being discussed."

5.25M cubic metres x 24% = 1.26 million cubic metres of ore for processing

1.26M x sg 2.7 = 3.4Mt ore

Taking an average grade in the supergene zone of 4.37% Cu (according to recent bulk test) x 95% recovery :

3.4Mt x 4.37% x 95% = 141,100 tonnes Cu

We should be able to process 3.4Mt over the first 2 years, producing 70,000 tonnes Cu each year.

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Revenue

Cu current price = US$3.50 lb : AU$8,100 tonne
Cashflow 70,000 tonnes x $8,100/tonne = $567M / year

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Costs

Mining Costs = AU$13.60 / tonne
Processing Costs = AU$14.07 / tonne
Total cost ore = AU$27.67 / tonne
3.4 Mt x $27.67 = $94 Million /year

Plus fixed annual company costs
- ongoing exploration and company expenses = AU$20M
- borrowings costs = AU$16M
= $36M


Total annual costs per year (for 1st 2 years) = $36M + $94M = $130M

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Net earnings

$567M - $130M = $437 M


After Tax and Royalties (30% and 2.5%)
$437M x 0.675 = $295M

Assume 150M shares
Earnings = $295M/150M = $2.00 per share

Using P.E. of 7 => share price of $14