Ann: Consolidation/Split - AZI, page-100

@ AI1967 I do not know how you arrive at your value of A$368 million per annum, but suspect you ignored important off-mine charges. Of the zinc content the refinery will only pay 85% at the indicated zinc grade of 63.3% of the concentrate to cover metal losses in its process. For lead it will be 95% at the indicated Pb content of 75.8%. In addition there will be treatment and refining charges, transport, shipping and harbour charges. Using the spot metal prices from last Friday of US$0.97/lb Pb, US$1.34/lb Zn and US$27.8/oz Ag, I calculate the effective value at-mine to be US$1,643/t Pb-concentrate and US$1,384/t Zn-concentrate. Multiplying this by your concentrate tonnages gives me US$144 million. Not that this is disappointing. It amounts to US$150/t mined whereas the operating cost will be about half I estimate. Given the excellent metallurgical testwork results for ore sorting, I suspect the process flow will include underground pre-concentration to reduce the amount needing to be hauled out of the mine and milled to be a little bit more than half the amount mined. Revenue would then be US$266/t milled for an excellent margin.

The calculations above are for currently declared resource grades. We can however expect better grades for the updated resources given the drill results announced since the resource estimation.

It seems the market has not done its sums.