comments from csm corp briefing

as announced yesterday, comments referring to JML:

'We're now trying to steadily grow our copper business and we've just made a low cost, low risk investment in Jabiru. We expect to ultimately have at least a 50% equity in the Jaguar project or in fact the company itself, that's yet to be worked out, but nevertheless the money we plan to spend there will go towards developing the project and growing the resource base through exploration.

(my comment: hope they pay a nice premium!)

Can you outline the forecast operating parameters of Jabiru's $55 million Jaguar development including the expected cash operating cost?


The start up capital is around $50-55 million which should be spent over 18 months and ongoing capital should be around $7-10 million a year. Based on an ore milling rate of 365,000 tonnes p.a., annual production is expected to be 8- 10,000 tonnes of copper metal in concentrate, 20-25,000 tonnes of zinc metal in concentrate and 800,000 ounces of silver in concentrate over a five year mine life. The cash costs for copper should be just under US$0.70 a pound before by-product credits and around minus US$0.15 cents a pound after credits. It's a robust little project but we'll be looking to double the size of the mine life and initially we'll spend about $1 million on exploration in the short term. That's the way we can really add value to a project.

(my comment: does that suggest CSM will fund exploration? sure sounds like it!)

You've described CSM's relationship with Jabiru as "an investment in and partnership with". How do you expect to develop the partnership? How might Jabiru fund Jaguar and does CSM expect to provide direct funding?

We have known the Jabiru Directors for many years. Like all of our acquisitions we are not hostile. Our preference is to negotiate a mutually beneficial outcome for all parties. We're happy to fund 100% of Jaguar on our own, either through the company or at project level. It is a decision that has yet to be made. Jabiru is currently talking with several groups regarding their project financing options. We'll use our balance sheet strength to support the project.

(my comment: given the Newmont [now oxr] offtake and the CSM support, JML should obtain some damn fine financing terms!)

Cdchi1