carrapateena copper project write off, page-4

"The Wall Street Article demonstrates that the Carrapateena copper project will never be economic"

Byron

No! The reporter tries to show that based on historic data for copper stocks available on LME that SHORT TERM copper is currently over priced.

You are assuming that the OZL value model for C is based on the current price of copper, which is highly unlikely. For back of envelope calculations they will have used long term average price which is less than half current price, but for feasabilty study they will have paid an economic think tank to come up with price ranges, based on anticipated supply & demand for the period that the mine will be operating.

OZL will only need to revalue the project if the projected developement costs or operating income & expenses go outside of the parameters used.

From memory, the anticipated price for C was around a billion dollars, so to get it for a quarter suggests that OZL used very conservative forward estimates & played hard ball on the price.

Regards

Rod