lots of sellers why bother, page-2

From a post on 27/7/06, I worked out revenues based on previous production levels for the company....and the price of commodities they produce.

Here is a cut and paste from that 27/7 post.


"58,000 tons of zinc @US$1.55 per lb equals $250 million
30,000 tons of lead @ US$0.60 per lb equals $60 million
1000 tons of copper .....$10 million
*One off silver payment from Colur'd'Alene $30 million
--------OR $350 million gross revenue----------------"


However the company are now talking about increased production of 15% : See following from their web site:

"Endeavor Mine
The Endeavor Mine is a major underground zinc/lead/silver mining operation in central New South Wales, 46 kilometres north of the town of Cobar and 700 kilometres from Sydney.

Operations commenced in 1983 and comprise an underground mine accessed by both decline and haulage shaft,and serviced by a concentrator, drying, storage and rail facilities. In the year to Dec 2004 the mine treated 1.2 million tonnes of ore and produced 78,000 tonnes of zinc, 38,000 tonnes of lead and ~1.0 million ounces of silver.

CBH is upgrading the mine to increase the through put from 1.2 to 1.4Mtpa per year, lower the operating costs and increase metal recoveries. An important phase of the upgrade is the installation of a pastefill plant to achieve a mine life of 9 years through full extension of current ore resources. The plant has been commissioned and is being brought up to a stabilised production rate of 450,000 cubic metres a year. The use of paste backfill will enable the mining of large blocks of high grade ore developed in previous mining and enable a more flexibility mine plan able to meet the new mill capacity of 1.4Mtpa.

Ore haulage has being improved through the introduction of road-trains with ore delivery direct to the surface to achieve both increased mine production and a lowering of costs. Studies are underway to deepen the shaft from 400m to 1,100m and to improve sections of the decline.

The processing plant has been undergoing progressive upgrade and improvements to circuits and can now support throughput rate of 1.4Mtpa with an increased zinc recoveries of 85%. A copper circuit is being constructed and will give the Company its first copper stream from August 2005.

At the improved performance levels the mine is expected to produce more than 100,000 tonnes of zinc, 60,000 tonnes of lead and 1.5 million ounces of silver per year in concentrate. Drilling in 2005 will further delineate the Limestone Target immediately beneath the current Endeavor orebody. An early best intersection of 41m of 11% zinc offers encouragement that this could represent a significant new discovery.

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100,000 tonnes of zinc in concentrate (or about 70 tonnes of payable zinc) increases revenue by $40 million PA compared to my earlier estimate-which would in fact matches up with Hartleys full year nett profit of $180 million or a PE of 1.5.

70,000 tons PA of zinc is 1/9 of ZFX production, but ZFX market cap is 25 more than CBH. Not really fair to compare....ZFX margins better, although CBH has 2 new big projects coming into production in 18 months.