URANIUM 1.02% $24.70 uranium futures

rio new bid for hathor - economics

  1. 2,127 Posts.
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    Hathor deposit about 60mln Lb presently ( say they increase to 80 mln lb) , very high grade and will be extracted open pit. Less recovery 85-90%.

    Quick look at economics:


    1. New bid $4.7 per share ( Hathor has 139mln fully diluted shares) = $650mln

    2. Development cost ( CAPEX) , as per Hathor presenation =
    = $460mln

    3. Operational cost $14.5 per Lb

    4. Production 5mln Lb for 10 years ( mine life)

    5. Another point is cost of capital ( CAPEX + Investment) = about $1bln , say at concervative 5% p.a. is $50mln = additional $10 per Lb


    Therefore total cash cost of production :
    (650mln + 460mln + (14.5* 50mln) ) / 50 mln Lbs = $22.5 per Lb

    this is simplistic way ( excluding cost of capital )

    So, essantially bidding war for resource which cost to produce about $25 per lb + $10 for cost of capital
 
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