Kanmantoo Copper mine ready to go ? For real ?, page-96

Hi plough it seems I didn't explain things very well.

There are two cost used for processing care and maintenance if nothing is processed and $8/t for any tonnage processed

The study processing cost is $4.64 + $8 = $12.64/tonne processed.
If the throughput drops to 1mtpa the cost would increase to $6.96 + $8 = $14.96/t

If the throughput increased to 2mtpa the coast would drop to $ 3.88 + $8 = $11.88

Running full at 3mtpa it would drop further to $ 2.32 + $8 = $10.32.

All based on the economic study assumptions of course.

Your concern about the excavated material associated development being gangue doesn't effect the cost calculations as the tonnage used is processed tonnage not excavated tonnage.

The following slide shows the relationship between tonnage and cut off grade.

a 50% increase in width (tonnage in three dimensions) is associated with a 24% drop in grade.

The economic study processes 1.5mtpa at a grade of 1.05%cu

Using those ratios if through put dropped to 1mtpa the grade would increase to 1.38%

1.5mt at 1.05%cu delivers free cash flow at current prices and ES assumptions of $67mpa.
1mt at 1.38% cu delivers free cash flow at current prices and ES assumptions of $73mpa

The grade increase assumption may be way out but it illustrates the need to adjust the cut off grade in line with current prices to avoid loosing money processing low grades at a loss if prices fall.

Its not possible to do that in an open cut operation which is one of the benefits of UG mining I guess.

My spread sheet indicates that processing 1.5mt at current prices would break even at a grade of 0.57% cu so the current cut of of 0.6% is still in the money.