BH have added significant additional tonnes from the first three mines extending mine life however the capex spend (sustaining?) is still high and should be truncated in distribution year on year, does not look right. Extending mine life should push back sustaining capex in some years. Upside there provided RVR confirms additional tonnes and mine staging.
2.18 copper price in 2020? Bollox. More likely 3.50-4.50 with electric boom and under investment in big mines. So copper revenue could eclipse zinc in this period which also hits highest con production. Upside there assuming Aussie peso behaves.
Mining liontown at 0.3mtpa and given price deck does not work, wheel spin st best, so this mine life extension is false to 2028 (fig 8.) needs higher production tonnes and prices to offset transport and grade. Looks like RVR needs plus 12% zn eq feed at 0.3-0.45 mtpa to work.
It's going to be difficult to hold any upside valuations without 10 years plus of mine life and real scope to hit the full 0.65 Mtpa mill capacity which will drive cost down as invariably good prices don't last. Need to really blow the exploration budget once production is running steady. Even using the debt facility as well.
RVR Price at posting:
30.5¢ Sentiment: Hold Disclosure: Held
