Ann: MAJOR COPPER GOLD DISCOVERY 41m @ 4.1% Cu Inc 9m @ 10.3% Cu, page-522

Everyone has a different way of determining the value of an ore body , I know experts think valuing an ore body so early on with only one or two drill holes is not wise , but the guys that had a stab in the dark at say Degrussa , or Red October or Nova Bollinger with only one drill intercept are probably sitting in some swanky hotel on the Gold Coast while the "wise" are still working as Fund Managers for the man .

When I look at Duchess , I envisage an open cut bulk tonnage mine rather than UG , at say 180 meters to the ore body from surface and * 70o meter * 400 meters footprint (dependent on other factors apart from ore size ie repose angle ) of overburden to remove at say $7.50.00 a BCM then that is around $400 M in CAPEX before mining starts .

Lets say there ore is over 500 X 300 meter footprint and 200 meters in depth at an SG of 2 that is 60M tonnes of ore we do not know the grade but we will guess 2% Cu eq at 85% final recovery

I normally work on a Life of Mine of 12 years so that would require a concentration plant of 60/12 = 5Mtpa

I am guessing a 5Mtpa plant would cost around $500M which would include tailing storage

So total CAPEX before mining started with say 100M for working capital would be $1B
Cu produced per annum would be 5mtpa * 2% * 85% recovery = 85K tpa of concentrate
lets say average price per tonne of concentrate (10% lower value than LME copper price ) is $7500 a tonne = US $640M per year in sales .
Costs lets say mining cost per tonne of ore at $12 a tonne (say a 1.5 :1 strip includes sustaining CAPEX ) and processing cost $45 a royalties so 57 a tonne of ore .
$57/.02 = $A2850 a tonne of Cu as mining and processing cost
guessing royalties and admin around 10% of sales per tonne so $750 a tonne
So A$3600 a tonne C1 costs

Sales of US $7500 a tonne Cu = A$10700 a tonne

Sales 10700 - 3600 $7100 a tonne net

$7100 * 85ktpa = A$603M per annum

Interest cost half project financed = 500M * 7% = 35M

603M -35M = $570M a year nett cashflow for 12 years then you need to ammortise out the initial 1B in Capex and the Depreciation if doing a statutory rather than underlying profit .

So about a 2 year payback but would require at least a quadrupling in current shares on issue to get sufficient equity to get finance .

This is just some musings so do not take it as gospel .