RXM is getting around the bottom now I think. I think what has scared people off is the amount of cash they are going to need to fund the project. I also believe after talking with infrastructure people and analysts that the funds they require will far exceed their present Capex. I was ridiculed by people with my last post where I pointed out some costs that I didnt see attributed to their capex. The washing and treatment of the concentrates at the port is going to be very expensive. The photograph of what RXM put out in their presentation is around $150m just by iteself without the cost of the pipe to get the concentrates there. I am not down ramping RXM I am just being a realist. To give you an idea I spoke to An infrastructure guy from Minmetals who pump their concentrates from the Century Zinc mine in Queensland. They said this is one of their biggest capex and operating costs and have big problems with the dust in the town of Karumba. All I can say is do your number with a capex of $2b for Hillside. This is closer to the real costs. Take a look at OZL $1.9b for 8 million tonne a year plant, ow can Hillside do 15 million tonne a year plant for $800m. Thats double the size of the OZL plant for half the cost of OZL plant, and OZL doesnt have all the infrastructure and logistical problems associated with Hillside. Impossible.If Im wrong anywhere , happy to eat humble pie, but dont think I will be. Cant see it ever getting off the ground t be honest. The cost of funding will kill the project. I think that at around $5.00lb for copper might work...Do your own homework, this is just my opinion based on realism. Its definitely a tough one. I think that JPM are spot on even a little optimistic, so don't knock them.
RXM Price at posting:
53.5¢ Sentiment: None Disclosure: Not Held
