Sorry guys, my quick google search for Xstrata's Ernest Henry underground resource led me to outdated data.
We should be focussing on a $589 million development spend to access 72 mt @ 1% Cu ore lying underground. The updated resource represents a 600% increase from what has been previously stated by Xstrata accomplished after a series of desk audits.
I wonder if Wayne knew that he could have updated his Rocklands Resource with desk audits rather than drilling, drilling, drilling? I guess that sort of operational advantage comes with being listed on an overseas exchange eh!
I wonder how accurate the desk audits will turn out to be and what assumptions were made in achieving a 600% increase in resources, and without stated recoveries too. Tsk...Tsk!!
Anyway, let's concentrate on the numbers and let me get this right - Assuming 100% recoveries, Xstrata will get access to 720,000 tonne of copper ore underground, for an expenditure of $589 million
That represents $818 per tonne of underground copper
Alternatively, if they were spend at the same rate on Cudeco's open pittable, jorc compliant resources of 1.06 million tonnes of copper in the ground, the amount of money involved comes to $873.7 million.
Those numbers equate to $6.32 per share if such an offer was acceptable to Cudeco shareholders, and they would also acquire a lot of potential for additional future resources with Wilgar, the SW anomaly, Rocklands underground ore and other regional trends all for nothing.
Many here would have Cudeco dead and buried with zillions of disparaging posts, since the resource upgrade, but I still believe that the Rocklands story is far from done and dusted as some would have you believe.
The above comparison helps to put matters into perspective now that Cudeco can boast a certified JORC compliant resource. I have always felt that ticking the JORC box would be a pre requisite for GAME ON, and I am wondering if the sting we have seen perpetrated over the last several days, together with today's exceedingly strong rebound, are signaling just that.
Cheers Nev
CDU Price at posting:
$2.22 Sentiment: LT Buy Disclosure: Held
