The link below takes you to a web page with broker reports. The currrent one by StoneBridge is well worth a read.
http://www.sandfire.com.au/go/investor/broker-research
As other posters could be aware, I think that SFR is a possability to expand Copper for OZL. Based on the Stonebridge report, does it fit the OZL strategy?
1. projected annual production of 50 to 60kt Cu per annum. Ticks the box on volume
2. Cost to bring to market - forecast $200m. Ticks the box on capital exp
3. Seven year mine life - this could be a problem
4. Cash costs US$1.35/lb - a bit expensive
5. Forecast full production in 2013. Ticks the box on late stage mine explorer
6. Soverign Risk is low - Ticks the box.
7. Infrastructure - Close to gas pipeline and main highway, but long distance from shipping. - Infrasture box is neutral
8. Upside potential - there would appear to be the ability to extend the mine life with further exploration and discovery in the area. - ticks the box here.
9. With a 30% t/o premium on current price = $500m. Still leaves cash for current development at P Hill, no debt and cash to do Cambodia Gold and Doolgunna. Bal sheet risk is low
10. (Now I am into guess work) Could reduce the C1 cash cost by doing a P Hill and increasing to 100,000tpa and concentrate grade of 50%. Obviously you would need to establish that the resource is there to support this expansion.
What do other OZL posters think? Would appreciate some comments pls.
HT1
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