Just had a look at the corporate presentation as I was scouring for coal stocks to get into.
Can somebody tell me what all the fuss about Mackenzie River is?
it's highly banded with high ash and low yield, so really from ROM to product coal you're only getting about 40% conversions. The implication is obviously a huge blow out in the OPEX. You'll end up with a product coal that needed to be blended with higher quality coal anyway to be exported.
A standard open cut operation running at sub 10 strip ratio and 70-80% yield should have OPEX around $80-100/t. I'd imagine with the amount of washing and waste involved here the OPEX would be well north of US$130/t. (not to mention you need to build a much bigger wash plant so significantly higher CAPEX).
Importantly I don't think this is a HDD production, probably a semi soft or PCI variant, which sells for significantly less. I think any sort of feasibility study would slam the project economics here.
SMR Price at posting:
$1.33 Sentiment: None Disclosure: Not Held
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