C1 Costs, page-2

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Whisky49

13,319 Posts.

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07/10/20

06:45

Post #: 47898123
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Originally posted by RockyFlintstone: ↑

Hi all,
Recently turned my attention to this stock and have just bought in and i am just looking into NCZ costs.
Management would have greater control of costs than they do of the Zn price.
Looking back through presentations etc management would bang on about being the lowest cost producer etc.
They estimated in a roadshow preso in 2018 that c1 costs would be approx USD $0.38/lb. The last june quarter was $0.79.
Putting aside the increased TC's, why does the cost remain so high?

Taking out the 10yr av of treatment costs from an estimate of $0.38 leaves a remaining $0.23/lb which would be obv be consumables, power, labour etc.

(Looking at June Quarterly at C1 Costs)
If you take out, say double the 10yr av for TC from the current quarter. $0.79-$0.30 that means remaining costs are still $0.49/lb???

Did management just get it completely wrong? Or am i missing something? Is there something else factored into the current cost that they werent aware of in 2018?

Expand

Basically it's a case of small scale Lab results coming up against the real world of commercial production. Any start up operation will present the most optimistic scenario as they are in the business of raising cash..

The biggest single cause of C1 costs being higher than originally expected is recovery percentage, which is well below original estimates, it's something that they have some control over and is where the focus is now, and is the main thing to watch going forward along with the ZINC price IMO.

Having said that the plant is ramping up, costs are coming down and price of ZINC $Au has been trending up although having a breather at the moment..being totally leveraged to the price of ZINC makes NCZ not a stock for the faint hearted..

Cheers Whisky

NCZ Price at posting: 14.0¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

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