General discussion inc SP movement, page-206

Let's hope the MRE update and the revised mine plan are all falling into place

We had a definitive offer of finance when we had a mine plan delivering $200m of free cash flow at high prices. The copper price has dropped , the costs have gone up but on the other side of the ledger the resources have increased and the mine life has been extended.

We could emerge with a mine plan for Kavanaugh Nugent and Spitfire delivering circa $200m of free cash flow over a longer period of time at much lower copper prices. A more conservative basis for financing than plan A.

In June July the copper price was in free fall which would give any lender extreme cause for pausing to see what was coming up.

Hopefully enough time has past for them to be comfortable with the support that has been demonstrated for the current price settings.

With the door to raising equity funds hopefully firmly locked how does debt funding the development costs compare with selling more royalties ?

Plan B will likely produce circa 60 Kt of copper and deliver NSRs of circa $700m.

$30m of Debt + costs+ interest = circa $35m = 5% of the NSR on 60KT of production.

To raise $30m selling royalties we would likely have to give away 12.5% of the first 85 Kt and 2.5% of everything else produced from the mining lease.

Streaming would be another possibility but would be similarly expensive it seems. See attached analysis of a recent transaction

Let's hope we get up with debt funding .