Capex and Opex sproggy, and in HCH's case never count out the...

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Bunn-Wackett

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09/06/25

09:06

Post #: 79364446
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Originally posted by sprogman1: ↑

I am also re-visiting the PFS NPV

Under the presented scenario NPV8% for Costa Fuego is $1.2bn with 19% IRR

I don't however look at this as being the final position
1. With La Verde and other optimisation/exploration targets this project will hit the target of 150,000 CU TPA per annum over 30 year mine life.
2. The underground capex will be moved out and I assume year 10
3. Copper and Gold prices will not go down to PFS assumptions. Copper will be moving to $5/lb while Gold prices will remain well over $3,000/oz and possibly significantly higher
4. a JV with the likes of a Hudbay (or similar scale) will de-risk and discount factor can be reduced from 8% to 6-7%

There may well be inflation on both capex cost and opex, but under this type of scenario we are talking about NPV $2.5-$3 billion and IRR over 25%

Then there is Huasco which i see a reality.This type of joint infrastructure sharing is essential for the mining plans in the area. With a startegic water company and the nature of the asset, water infrastructure discount factor 5-6% would be realistic. The NPV would be driven much much higher

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Capex and Opex sproggy, and in HCH's case never count out the 'expenses'... You can make all the assumptions you like about the IRR down the track but it'll be no more accurate than forecasting a share price 7 to 8 years out.

HCH Price at posting: 57.0¢ Sentiment: None Disclosure: Not Held
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