Copper will always fall when sentiment on world economies is low and will rise when sentiment turns positive. Even a little minnow like HGO has its shorters. The copper market is a big magnet for manipulators who profit from creating false impressions.
My focus is on the fact that the developed countries population that consumes a lot of copper is growing as the underdeveloped countries rise out of poverty. The race to net zero is icing on the cake.
Shorters.
Shorters continue to smell punters sweating about what the future holds. Fertile shorting ground.
" exactly what price copper needs to be to make the mine worthwhile and then a profit I haven’t looked into that, maybe someone here has?"
Running at 50% capacity HGO's AISC is currently circa au$ 2.88 ( circa us $ 1.87. )
The quarterly report gave us the heads up on how the breakeven costs are dropping as production ramps up.
IN Q2 the all in sustaining cost (breakeven cost ) fell from au $3.85 to au$ 3.26
My spread sheet tells me that when the ramp up to 50% capacity ( 2 weeks on and 2 weeks off) is achieved and we are processing 1.6mtpa at a cu grade of 1.23% cu and au grade of .13g/t that will drop to au $2.88/lb at 0.65 US$ to the au$
The other thing that drives the hedge price target is the ongoing cap ex to further develop the mine to reach full targeted production
Q2 told us that is also dropping from au$1.79 to au$ 1.48.
The good news is we have hedging more than sufficient to pay for that up until 50% capacity is reached and deliver excellent free cash flow as well.
Important to remember that with an underground mine the feed grade is something management can control by adjusting the cut off grade.
HGO Price at posting:
5.5¢ Sentiment: None Disclosure: Held
(20min delay)