Low grade is the only downside I could see. But... there's always a but!.. Scoping study done late last year estimated NPV at a copper price of US$2.20/lb to be $710m. Infrastructure close by - Ernest Henry water pipe goes straight past proposed plant site, governement currently upgrading the road that goes past the plant, close to existing workforce, Xstrata are 11% shareholder at 22c with option to buy 51% of the project post valuation and milling is pretty straight forward with no complication... plus with Xstrata already in bed with them I'm sure they will no doubt be looking for some additional feedstock for their smelter in Mt Isa - I just like the story and I think it is way under valued at the moment with mkt cap of ~$50m.
In their last quarterly they mentioned that potential economic viability of the project, indicated by Stage 1 of the study, has been enhanced by a massive increase in the 3 month LME copper price from around US$1.76 per pound in late September 2005 to around US$3.30/lb in late April 2006.
Life-of-mine revenues would increase by A$2,300M to A$3,900M using current copper and gold prices rather than the September 2005 base case financial model!!!!
THAT'S AN INCREASE OF $1.6 BILLION ADDITIONAL REVENUE FOR NO ADDITIONAL CAPITAL OUTLAY!!!
URL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
