bulk test announcement thread, page-93

Buddy,

For the native copper zone, the copper equivalentce is the copper grade as far as the company has declared. Look at the announcement, particularly the page where it lays out in a table what is payable (recoverable) from each type of ore source. For native copper it has no payable cobalt. Gold is still out for the verdict but I would say unpayable.

stillthefoxhat,

Thanks for your vote of confidence, of sorts, in my ability to use anthropomorphy on the EPS forecast. I would however say my analysis is qualified with such qualifiers as;
- I am working back of the envelope
- I am not a cost estimator
- I go off what cost comaprisons Google delivers (all praise)
- I go from what selectively is released by the company. This includes the continuing lack of disclosure as to what proportion is native, chalcocite, oxide and primary.

Process,

I'm a geo. If i've made any fundamental errors with regards to metallurgy, you're welcome to correct me. DYOR after all.

I also dispute your claim that the strip ratio is lower in the early years. There is no proof of this. indeed, if we take these most recently released metallurgical results, the richest portion of the ore body is in fact the chalcocite zone (because it is 4% Cu and potentially payable cobalt) not the native copper (which is only 2-3% Cu, no payable cobalt).

Of the ore body, 12% is chalcocite if you believe the met holes are representative (they are not; they are taken along strike not across), 12% is native copper, and the rest is primary. This leaves the oxide - which comprises however much of the oxidised protion of the regolith above the native copper and chalcocite zones. These are buried at depth, hence, before any bonanza payout, all oxide mineralisation is going to be a cost for pre-strip just to access the first tonne of transitional material.

This logically leads me to conclude there is going to be a cost. If you need 3 million tonnes of transitional to throw through the plant in year one, and the strip ratio is 3:1 (which IS low) that means you must strip out at least 10Mt of waste in year one. If the overall strip ratio to get to the primary is 5:1 (which is STILL low) then...maths. You need to move much more than 10Mt of waste, etc.

The "low strip in early years" argument also then implies that once the company has run a low-strip high-grading operation in the first 3 years, ater this the strip ratio and waste burden gets thrown back higher and puts a greater burden on the higher-strip primary ore. Which isn't as rich, and hence, costs will rise, and EPS will go down, and longer-term the share price won't be as healthy.

Finally, if one of my errors wasn't using $28/lb Cobalt prices, then thats just me being pessimistic.

The previous stock disclosure was, however, one of those fundamental errors I made. Clicked the wrong button. Wanted to wrap it up on a Friday and go home for beers.