afr article, page-9

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