BRW breakaway resources limited

Ann. looks good - future royalty projections cover current...

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    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
 
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