Ann: First Cash Received from Copper Production, page-13

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21/02/24

21:41

Post #: 72522738
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Originally posted by ozbucheron: ↑

How much cash hit the bank?

Are these guys going to run out of money?

Cash at January 1 = A$10M

Expenditure last quarter = A$15M

Increasing production ==> increasing cost, say $20M this quarter.

So to keep the wolves from the door they have to produce A$10M - A$15M worth of copper. I'll ignore gold for this calc.

Say they net 70% of the value of the copper in con

Copper price = U$3.88 / lb
XR = 1.52

So they need to sell

10,000,000 / 70% / 3.88 / 1.52 / 2204 - 15,000,000 / 70% / 3.88 / 1.52 / 2204 tonnes of copper

or 1100 - 1650 tonnes of copper

if mill recovery is 90% and ore grade is 1% then they need to treat

1100 / 90% / 1% - 1650 / 90% / 1%

120 - 180kt of ore this quarter.

Seems a close race to me.

Expand

If you are seriously contemplating investing in HGO do yourself a favour and read the Economic study. The forecast copper production for each month is detailed there. There is no need to muck up the back of an envelope guessing.

They have a bunch of hedging in place at $12,500/t net of hedging margin so it won't get any worse than that.

Cash flow from forecast production @ hedged prices running the plant at
40% capacity is $17m a month.

Cash will be tight in the ramp up but I think they will be dropping the cut off grades which the study also tells us has the potential to increase production by circa 55% and reduce mining cost by getting more bang from the bucks spent developing access to the stopes.

HGO Price at posting: 6.7¢ Sentiment: None Disclosure: Held
3 Upvote

0 Great analysis

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