Ann. looks good - future royalty projections cover current market cap.
ELOISE COPPER MINE PERFORMING STRONGLY WITH PLAN
TO EXPAND FOLLOWING DEVELOPMENT AND
RESOURCE UPGRADES
HIGHLIGHTS
• Major capital development initiatives at Eloise completed.
• Production rapidly returns to nameplate 600,000tpa throughput and expected to increase further.
• A$3M plant expansion initiated to increase throughput to about 740,000tpa.
• Substantial increase in Indicated and Inferred Resources to 3.5Mt @ 3.1% Cu including a fully
developed Probable Ore Reserve of 2.4Mt @ 2.6% Cu with excellent potential for further increases.
• Current life-of-mine base case value of about A$40M estimated for future accumulated royalty
earnings from Breakaway’s 30% net profit interest, with earnings expected to resume in midcalendar
2009.
Breakaway Resources Limited (ASX: BRW – “Breakaway”) is pleased to update the market on a number of
positive developments at the Eloise Copper Mine located in North Queensland, in which Breakaway has a
30% net profit interest. These developments, which will reinvigorate the operation and better position it to
benefit from current high copper prices, include the completion of major capital developments, increased ore
production to exceed the current plant processing capacity, approval for a 23% expansion of
the plant throughput and a substantial increase in Indicated and Inferred Mineral Resources to
3.5M tonnes @ 3.1% Cu increasing the potential mine life beyond five years.
As a consequence of these advances, current life-of-mine, future accumulated earnings from
Breakaway’s 30% net profit royalty interest in the operation are estimated to have a base case value of
about A$40M EBITDA (undiscounted) based on a production forecast of 3.3M tonnes @ 2.6% Cu and an
average copper price of US$6,200/tonne Cu (US$2.80/lb Cu = A$3.16/lb Cu using forward price estimates of
Macquarie Research Commodities, 14 July 2008 ). At the current copper price of about US$8,000/tonne the
estimated accumulated royalty earnings would total about A$80M. Based on the mine’s production forecasts,
the expectation is that royalty earnings will resume in about mid-calendar 2009, after all capital costs have
been offset against profits in the 2008-09 financial year.
The base
Ann. looks good - future royalty projections cover current...
Add to My Watchlist
What is My Watchlist?