Ann: Drilling Expands Cu-Au Footprint at Kanmantoo Underground, page-12

The whole equation of cost and profitability is so much easier to understand if costs aren't bastardised with precious metal credits and reserves are converted to a cu equivalent percentage based on current prices.

Its very logical to recognise that precious metal recovery adds to revenue and effectively increases the equivalent amount of copper recovered.

Once you start to think about reserves and costs on this basis its very easy to do a feasibility study that the human brain can get its mind around.

If I'm right in thinking that Mining cost will be $75 /t of ore and processing that ore through our plant will cost $10/t and all the costs beyond that are similar to our historical numbers and to replenish the reserves and infrastructure will involve annual capital costs of circa $14m then it seems to me that at sector average profitability we will need to me mining and processing ore with a cu equivalent grade of 2.2% (1.32% to break even) as shown in the screen shot of my UG study spread sheet that I posted earlier in the June quarter thread.

It will be interesting to see what equivalent cu grade the resource estimates deliver.