Let's talk DSO, page-248

From the Chatgpt, breakeven CAPEX for the Storm Copper Project,

We calculate the maximum CAPEX value at which the project can still generate positive operating profit. Let's revisit the financial structure:

Breakeven Analysis

1. Breakeven CAPEX Definition:

   • The breakeven CAPEX is the point at which the annual operating profit (revenue minus total costs, including annual CAPEX allocation) is exactly zero.

2. Methodology:

   • Use the same assumptions as the previous analysis:
     • 7% loan interest rate
     • 10-year loan repayment term
     • 13-year straight-line depreciation
   • Solve for the maximum CAPEX that results in a zero operating profit for Cyclone and Chinook individually.

I'll calculate this now.

The breakeven CAPEX values for the Storm Copper Project are:

• Cyclone: $309 million
• Chinook: $379 million

Explanation:

• These values represent the maximum allowable CAPEX (including loan repayments and depreciation) at which the project can achieve a zero operating profit.
• If the total CAPEX exceeds these values, the project would generate a negative operating profit due to insufficient revenue to cover all costs

Therefore, setting up a mining camp and processing facility (at current copper prices, based on 1.5 Mtpa treatment rate, earlier assumptions) indicates AW1 need capital costs to be under $300 million.

(Disclaimer: Chatgpt modelled data, use with caution)