Cu1You raise some valid points.Ultimately any discussion around...

Cu1

You raise some valid points.

Ultimately any discussion around CAPEX or OPEX at this stage involves wild guesstimations, to a degree that I think it is not worthwhile. The 2 billion CAPEX figure being bandied around is at best IMO an approximation based on the cost of RIO's Argyle Cave block diamond mine development. I certainly don't see any sound basis for this figure and there clearly isn't one when the project is only at Resource delination stage.

Whilst as you say only 79 holes have been drilled in the project it does include 100m x 100m infill drilling which clearly has given OZL some confidence to pursue what appears as a high grade commercially viable deposit. Certainly their is risk buying a project that hasn't reached a JORC compliant Mineral Resource, but there is clearly also opportunity in purchasing an earlier stage project as C. and taking it through the necessary studies and process as opposed to paying top dollar for an advanced stage project.

Management are backing their interpretation of the quantity and grade while conceeding it is conceptual in nature and therefore carries an element of risk.

I would be very agnostic to any report that gives a NPV for C. when quite clearly metrics to deduce such a valuation are lacking.

The aquisition at 300m represents 4-5 AUD cents per lb of copper(assuming OZL's 2.7-3.3Mt). Some comparisons are HudBay paying 9.9 c/lb USD for Constancia (feasibility completed), First Quantum 3.4 c/lb USD Haquira deposit, PNA paid 3.4 c/lb USD for Inca de Oro(much lower grade and smaller)

The jury will be out on this one until the numbers become tigher over the next few years but personally I feel it represents fairish value for what is an early stage resource.

Certainly a better path IMo than what EQN have done etc, and probably one of the better achievable deals when you consider the we are at the height of the commodity cycle.


They also pick up more exploration ground in the Grawler Craton which continues to be Australia's premier Copper ground.