Just wanting to correct the misconceptions that a few people have for whatever reason (!!). This might help inform the discussion.
We need to compare apples with apples:
- The AISC rates quoted by some here are based on the old MLX UNDERGROUND operations, which was a disaster. That's why they got out - with AISC that was losing money of course they would !!!!
- The MLX Nifty restart and the CYM restart were based on an OPEN PIT operations. Much different economics. Original CYM management went for cathode production only (SX plant). MLX was concentrator only. Again, different economics between the two.
The Fifield Restart (if I can call it that) is a low cost start up to get some money in the door to minimise further dilution and pay back debt.
VERY SMART - especially given the market has little faith in this getting off the ground.
AISC of the Fifield SX plant restart will be very low - there's no open pit restart, they'll just be chasing the leftover copper in existing heap leach pads. So, think just SX plant refurb (minimal cost) and using excavators to churn the pads. AISC won't be anywhere near $3/lb.
BUT, for arguments sake, say the first stage AISC is $2/lb or less (say $6,000/ton).
If they do 5,000 tons in first year, that would be - 5,000 x $6,000 = $33.57m in costs
vs
Copper price of (say) $12,500 x 5,000 tons = $62.5m
revenue (I use a lower Cu price than current to account for CU variations and price achieved at market for our cathode)That's around AUS$30m in
FREE CASH FLOW. Year 1. As a conservative estimate.
How do you like them apples ??? ANd if they do more, it will be more free cash flow.
Anyone who'd say the economics of the Fifield Restart is not financially sound, AND profitable, is whistling Dixie IMHO. Bring on the FID !!!
Cheers
