buys carrapateena , page-63

Hi missionx,

I understand the calcs are not an NPV. What I am highlighting are the technical challenges that seems to be seriously underestimated ,which in the end will affect the financials. We can discuss Capex& Opex another time.
Physically this is not as straight forward as it seems. The main fact this is not at surface or under a shallow cap. The ore body is 0.5km deep and I question the whole purchase.
Strategically, OZL has an agreement to buy 100% of C. without mitigating risk. Teck walked away when they could have found a partner to do it, why didn?t they do it? The Chinese didn?t like it either and there were 6 companies bidding last year.
The estimations says that it will take ~7 years to come into production. Is this a sound investment when there are other companies where to tap from? I believe Rex minerals has better merits than Carrapateena.
Seriously, people seems to underestimate what block caving really is. Previous reports indicate that the C. ore body is embedded in granite rock, as far as I know there is not block caving mine in the world caving such a hard rock and the geometry seems challenging (check the AFR from yesterday). Again, I question if production rates will be achievable and if they make it, at what cost?
A market report values the NPV of the C project at ~$280m meaning that the purchase was at NPV, is it really worth it?
Carrapateena stoped drilling after 78k of drilling (giving the depth this is not much). Usually exploration companies will get their explorations to JORC to maximise the value of the project, this was not the case. I wonder again...why? If I read between the lines...further infill drilling could have reduced the grade and reduced the attractiveness of the project given the boundaries of the cylindrical ore body.
The highest risk in my view is that this has no JORC. As mentioned previously, more drilling has to be done and there is a chance that the grade and size of the ore body after the new data could be reduced. As a result, the resource upside is limited.
The only saving grace in my view is that OZL can find another ore body closer to surface within the tenements that came with the purchase of Carrapateena.