"You rightly bring up the shortcomings of the rail line to Townsville, this was one of my questions as to how they are going to get line capacity to ship DSO ore prior to the rail spur being completed and I expect the DSO re will be heavier tonnages than CU in concentrate. so the point you make about the rail issues further leads me to think CDU will not be able to sell their magnetite at a profit in the short to medium term time-frame."
It doesn't matter if DSO is available to ship before the spur is complete because I'm sure Ostojic's will let their spur become avaible for a cost as long as our rail contracts are in place. Also trucking is an option because Sandfire transport concentrate the same distance from mine to port and find it profitable and the overheads of being Port Headland based is a lot higher than Townsville. How do you have a heavier tonnage? A tonne of feathers or a tonne of bricks is still a tonne and I believe the percentage of copper will be about the same so roughly no change to the cubic metre.
"Shadow are you suggesting CDU will make a play for AOH or look to some form of J/V - W.M said this wasnt on his agenda but I can see how it would be very attractive to the top 3 Chinese holders- What happens to the dividends if they go down this road ?"
Their deposit has been valued at close to $200 million I think. Their total project costs in the order of $400 million so the Xmen would have been up for $100 plus $200 costs equalling $300 million. Joint venture maybe, they mine we process and split the profits. Altona have a DFS for Little Eva and what good has it done them? We will be mining and producing a profit for a decade before they ever dig out a shovel full.
CDU Price at posting:
$1.84 Sentiment: Buy Disclosure: Held
