A couple observations on the last point.
The Endeavour mill / operation is encumbered with a 4% net smelter royalty - that’s as I understand applicable to all material through the mill whether mined from the endeavour site or otherwise. So CSA would likely get hit with this if sending Zn ores through the Endeavour mill.
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There’s been no toll treat agreement signed just an option agreement to do one - cost is opex +35%. It looks to me this “alliance agreement” between the two parties was more around MAC securing water.
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Without jumping the gun too far on economics here but imagine two scenarios for MAC
- Haul Zn 15km down the road to Peak and back haul with Cu ore to CSA. Get ~80%+ recoveries. Pay cost. Have no added royalties.
- Haul Zn 30km up the road to Endeavour with no back haul. Get [?] recoveries. Pay cost +35%. Have 4% added royalties.
The added haulage, potentially lower recoveries, higher cost (+ margin) treatment fees and the increased third party royalty could actually wipe all your margin away from any zinc ores.
A long winded way of saying I don’t think the POL toll treat option is that good for CSA given the margin loss across the board and Peak may provide a much more viable alternative (as well as helping fill CSA Cu mill). Anyway best not talk too much about synergies with the neighbour as it seems to upset some.
(20min delay)