resourcestocks august edition, page-2

“An ore supply deal with Xstrata is another route to value for Exco simply by virtue of the fact that we would not
be spending the capital on our own project, combined with supplying ore into a much more established and lower operating cost environment,” Anderson said.

“They have a 10-11 million tonne per annum mill that is already paid for. The economy of scale means that their operating costs are probably half of what we could create via our own stand-alone route.

“In our view, with the end of their openpit mine life approaching, we are in a position to meet their needs for additional ore. We both end up holding a couple of cards; they have the infrastructure and a competitive cost base, whilst we have the ore and an ability to find more. From our perspective we see a great basis for a win-win situation.