New start, page-59

Yes it is approaching a very attractive buying zone with a potential nice dividend kicker bonus.
One thing I am keeping a close eye on is the growing temptation for sovereign nations ( and AUS.State Governments ) attemptsing to prop up revenue by plundering miners with higher royalties/taxes.. Chile looks like being the next one. While no material impact on OZL it is a disturbing trend which we hope does not gather momentum.



"On 1 July, the Chilean government put forward a proposal for a new tax regime which will now be debated in Congress. Although limited details were released, we estimate that the proposal would increase the total tax rate for a 50th percentile producer of over 200ktpa Cu to just over 60% if copper prices hit $11,000/t. This compares to 40% under the 2010 tax stability agreement that major mines have in place. For higher cost producers, the relative increase is higher due to the revenue-based component of the royalty.
The proposed tax regime could act as a headwind to new investment - we estimate it would increase the incentive price required for a 12% return from $3.60/lb under the 2010 tax stability agreement to $4.16/lb. Nevertheless, the proposals may well be amended when debated in Congress over the next few months, and miners are likely to push back against the proposal given the backdrop of a currently sliding copper price.

We have also looked at the historical price - cost curve relationship for context on where copper has traded in a significant downside scenario. Looking at the 2022 / 2023 C1 plus SIB capex cost curve, the 90th percentile is around $6,050/t ($2.75/lb).
Based on recent history prices would be unlikely to sustainably trade below this level, but prior price recoveries have arguably come more from reduced scrap supply, and demand turning back up, than major mine production cuts. Not to mention that price cycle lows have regularly fallen well below the 90th percentile of the cost curve."