Mineweb had this article about an extension of a copper mine in Zambia. Here is the link
http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=153836&sn=Detail&pid=36
What I found interesting was the cost and tonnes when compared to OZL.
KCM plans to increase production by 35,000tpa at a cost of $180m
OZL Ankata is planning to produce 25,000t for $148m
KCM’s capital cost per tonne of yearly copper production = $5,142
OZL’s capital cost per tonne of yearly copper production = $5,920
OZL’s capital cost per tonne of yearly copper production is 15% higher than KCM’s
For OZL holders, the question that needs to be asked is whether 15% extra in capital costs is worth the reduction in risk?
Now, I know that there is not a 1:1 relationship here and the comparison is a bit “loose”, but it does provide some data that can help holders reassess their positions.
HT1
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