There will probably be a crossover point between capex and grade...

There will probably be a crossover point between capex and grade and tpa of copper. As DJ_420 has pointed out, as the overall grade drops, the size of the processing plant to get the same tonnes of copper out increases with associated increases in capex. Also, as the grade drops, the associated infrastructure to move the ore also increases.

If we look at the C resource (and I know that this is the wrong way to go about it - but I will do it anyway), we have the following:

We go from 292mt at 1.29% copper for 3,766,800t of copper to
760mt at 0.78% copper for 5,928,000t of copper. So you are mining 160% more material at 0.78% to get only 57% more copper. Even going from 1.29% to 1.02%, you are having to mine 62% more ore for 29% more copper.

So, depending on the ore grade and where the good grades are and where the poorer grades are, OZL may be better off sticking to the high grade sections, as the CAPEX will be lower and the ROI will be much higher. As I said, there will be a crossover point that makes sense.

The other thing is that OZL could build the plant to be expandable over time. i.e justify the capex on the high grade mine plan, then expand the plant for the lower grade sections. The way the capex works is that the greenfield development picks up the infrastructure costs, wheras the brownfield expansion only needs to justify the incremental capex.

The other reason for making the processing plant expandable will be whether Khamsin and potentially Freemantle Doctor are also economic. They may not be for a greenfield site, but could be for a brownfield expansion.

HT1