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Post 2 of 2.
We need to separate the H4 project from the rest-See previous post.

The Western porphyries which has 729 mill tonnes with 0.64% copper & 0.39 g/t gold is a large free standing resource, it is located close to the H4 project. Drilling is proceeding on other gold/copper projects in the region.

In the second period starting from 24 Oct 2003 and ending 23 Oct 2006, TYC needs to spent $US3 mill. and can then claim the licences subject to BHP clawing back rights. By Jan, it already had expensed $2.6 mill of this, so I think that by the end of June, TYC will claim 100% of the licenses subject to BHP's clawback rights.

AGREEMENTS:
"If BHP Billiton exercises its clawback right the parties shall enter into a joint venture in respect of that SMO and that SMO will form a "JV Project".
In respect of the first JV Project BHP Billiton will pay to TCC an amount equal to 310% of all of TCC's historical costs incurred in respect of the Region up to the date at which BHP Billiton elects to sole fund the SMO the subject of the JV Project (other than costs in relation to the H4 Starter Project). In respect of each subsequent JV Project BHP Billiton will pay to TCC an amount equal to 310% of all of TCC's historical costs that were incurred since it last elected to sole fund an SMO".

COMMENT: In that case, TYC holds 30% of the licenses and will be freefunded to the BSF. Should the Pakistani Govt participate than the percentages will be BHP 52.5%, TYC 22.5% and the Govt 25%. (See also "Alumbrera"-below)

There are some other clauses and this is one: If either TCC or BHP Billiton dilutes to a 10% or less project interest then its interest will be converted to a 1.75% net smelter return royalty.

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What will happen, once BHP claims back the 70%? The work can continue followed by a BSF and Plant construction: TYC will contribute to both. The complete plant will cost some $1.1 bill. If the project proceeds then a new partner may be called in and it could be the Chinese or Indians. TYC has the right to share its share with such a partner.

There are a number of combinations possible depending on the requirements of BHP. However, I do believe that TYC can at least afford a holding of 10.1%.
TYC mentioned that they would use the profits from the H4 operation to finance their stake in this big project, but I doubt that BHP wants to wait now the copper prices are good.

It is quite possible that the H4 project will be carried out at the same time as construction of the big plant for the Western Porphyries project takes place, that is if BHP wants to proceed. If not, then either the Chinese or Indian Govts can be approached. (There is a big shortage of copper plus the fact that these Govts are trying to lock in resources).
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LARGE PORPHYRIES--HIGH COST--BIG PROFITS.
Example: ALUMBRERA has 0.48% copper and 0.53 grams gold/t:
ALumbrera is an operation in a very remote area, they use a 316 km slurry pipe to shift the concentrated gold/copper and their power comes through a 202 km line.

Wheaton has a 37.5% stake in the Alumbrera and collected a $US125 mill div. in 2004 (I hold a stake in Wheaton):
http://www.wheatonriver.com/gold_projects/alumbrera/


I also hold a stake in NCM ($A17/share), the owner of the TELFER project (See previous post) which has just been run in. Cost: about $A1.1 Bill.

I would think that it would take some 4 years to repay the Capital costs but a mine at the Western Porphyries would last for many years.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.