Ann: Quarterly Activities Report-MOD.AX, page-55

First 55 Last

Share
Profile

Follow
freeheel

316 Posts.

36

09/05/16

07:41

Post #: 17708654
Share

Originally posted by Scarpa ↑

I have decided to circle back to this thread. A little disappointing this week with how the SP has gone. When going back to this thread I feel that the latest batch of assays increase and confirm the resource base but the overall increase I don't believe get us to the 50mt target just yet which would support 10 years of production (but the results are encouraging and I feel the next batch or two over the next month or two will get us there ). The next drilling/assays will be the key but expect more resource to be found/evaluated. In terms of a resource this exploration program has been very hectic and very fast compared to other exploration programs - given the pace I am surprised the market hasn't realised that a potential mine is there. Also given what the resident geologist and others are saying they do believe they are onto something.

On the downside however is the copper price is an absolute key to project development in this case, and the movements in the last week have been adverse. However the 1 year trend is that copper inventory is going down so at some point price will increase and I think it will happen within the next 6 months. Having said that this stock is not one for the faint hearted - if we had a copper price that was even at 2013 levels I think we would be having a goer here. Now given we are likely to be producing concentrate just be mindful that the silver, zinc etc etc will essentially mean on the credits received by the end customer that production costs will, IMO, be within the lower to median quartile of copper developments generally. However given the capex spend required, which will still be relatively low against competing new Australian operations IMO seeking to enter a market, the fact is we need to increase the resource still (and I think we have good opportunity there and I do think that will be a formality), so ultimately it boils down to copper price IMO. As I said anything around $2.75 per pound and we have a goer IMO (current price - %2.20 per pound). Now if any of these assays show gold (or silver grades are very high) that will be a huge game changer as the credits received will mean very very low production costs. All IMO.

Expand

Interesting thoughts on the copper price. I have noticed a number of companies recently using much higher metrics in their PEA/PFS, which suggests any mine/deal done here may also use a much higher metric.

For example, the recent Oz Minerals' Carrapateena update to the ASX used a LOM Cu price of US$3 in their PFS. AsiaMet Resources (LON:ARS) used a LOM price of $3.25 (and were on a podcast recently explaining the logic of that - worth a listen if you can track it down).

MOD Price at posting: 2.7¢ Sentiment: Buy Disclosure: Not Held
3 Upvote

0 Great analysis

Reply

Top Stories

VYS

Vysarn acquires Waste Water Services Pty Ltd for $7.5M; WWS to become subsidiary as expansion continues

HVN

Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

Consumer Staples Shine Amid Retail Slump – Key Stocks to Watch

CYM

WA Nifty copper project steps closer to restart with Cyprium Metals inking $40M loan from Glencore

HLX

Helix investor makes partial takeover bid, proposing board changes

TBN

Tamboran kicks off Shenandoah South pilot project with SS-2H well spud

Results wrap: Austal, TPG Telecom and Downer

LLC

Lendlease sells off US east coast construction operations in latest global divestment push

PYC

PYC achieves key designation for drug aiming to treat blinding eye disease ADOA

EBR

EBR reaches review milestone for wireless cardiac pacing device