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10:49
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Originally posted by GeoFiji:
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Contained metal does not equate directly to market cap or underlying NPV of the assets. The mining economics will determine the NPV and the market has assumed a certain NPV when pricing the shares. In a detailed study the mining costs, metallurgical recovery, mining method, waste ore ratio and many other things are taken into account to put a net present value on a deposit (NPV). The high grade nature of the CNB deposits means that they are likely to be more profitable than lower grade deposits although companies have a bad habit of adding lots of low grade in to add tonnage so the grade of JORC resources may look lower than they should be. All other things being equal it is better to have higher grades because you can make a profit through commodity price downturns whereas lower grade mines will close. CNB need to generate JORC Resources which are assets, everything else is exploration potential. With the ability to prove up JORC Resources with additional drilling at Duchess/Ivanhoe and a chance to add additional Nil Desperandum and Mt. Birnie JORC resources (and test exploration potential at these areas), copper could add some real asset base to the company value. With the Hammer Metals projects getting hammered with drilling this year, and the resource base growing, the prospects of a nearby copper-gold processing plant are looking positive in the next 3-4 years. Having proved up high grade resources within trucking distance will add real value. If CNB exploration is very successful it may be in the position for its own processing plant but building two close to each other doesn't seem like a good use of capital. I expect consolidation at some future point, especially if CNB hold key high grade resources that tip the balance towards the project going ahead. If CNB have JORC resources they have a good hand to take into future negotiations. I think the resources required are around 100Mt @ 1% Cu.eq for a stand alone copper project. With the high copper grades and considerable gold credits CNB will need a lot less than this tonnage, possibly only one third. Some of the recent Mount Birnie gold results would be happily announced on a gold project! Underground resources may need to be slightly higher grade than this but this does not seem to be an issue so far. There are several toll treatment options within trucking distance so an early open pit at Mount Birnie on the high grade zone under the old workings could give early cash flow whilst other deposits are being proved up. It would also reduce the need for a capital raise.
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@GeoFiji have you ever worked around the Greater Duchess / Nil Desperandum areas in Mt Isa ? perhaps share your thoughts with Rob and his team - they may have a position available for your services at CNB - you could be an addition to their highly experienced and proven te am do you know Rob ? - many top geo's seem to know each other - the industry revolves around a small World at times
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