big c, page-32

Hi Alley,
Thanks for the feedback. It is much appreciated.

It sounds like 9.88% for WACC is a reasonable number to go with. (I will not argue with the world's biggest resource company!!!!)

The model I have built assumes a copper price and a C1 cash cost, that includes by product credits. So the gold price is not a separate line item, rather it is "embedded" in the C1 number. For simplicity, I have kept the C1 numbers stable. If others have a different view, please put them forward with your reasons why. If you make a good case (like alley has done), I will be happy to put it into the model.

Alley, your point though around the USD/AUD and copper price is a good pickup.

If the long term copper price is $2.50, then I will assume the $ must be 80c.

So, based on the following assumptions

WACC 9.88%
USD Copper price 2011 $3.90; 2012 and 13 $3.30; 2014 $3.00 2015 & ff $2.50
USD to AUD 2011 $1.05; 2012 and 13 $0.95; 2014 $0.90 2015 & ff $0.80
Production tonnes, timing and C1 costs as per the above spreadsheet.
Cash has been discounted to take a/c divi and capital return for this year.
Capital cost of $1.6B AUD for C
Capital cost of $160m AUD for Munda
I have not factored in a long term dividend or the current share buyback.

This gives a sp NPV of $2.17