PNA has bought a 66% interest in a copper mine in Peru for a cost of $45m usd from Codelco. The mine aims to produce 50,000tpa of Copper for a mine life of 10 years. Pre feas, feas and construction has not yet started. It also has an ore grade of 0.46%. It makes SFR very very very very expensive. There was no mention of the C1 cash cost. I would suspect that with the low grade and low throughput, the C1 will be high.
I hope that OZL is being more selective in it's choice of assets to purchase. Grade, C1 cash cost and mine life are critical components.
IVA is 0.5% copper, but 33 years mine life for 100,000t of Cu per annum. This is 10 times the copper that PNA is purchasing. That would mean IVA is worth approx $500m aud. (Mind you the calcs above do not value the molybdenum or Rhenium or the potential difference in C1 cash costs that affect the cash flow over the life of the mine).
I am sure that the Bus Dev team at OZL are watching the PNA purchase with interest and doing some "what if" scenarios.
HT1
OZL Price at posting:
$10.40 Sentiment: LT Buy Disclosure: Held
