CYM

7.32%

4.4¢ cyprium metals limited

I guess what the bulls are thinking is the AISC for the majority...

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07/04/21

16:41

Post #: 52306253
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Originally posted by setfire2thehive: ↑

I agree with the logic entirely, i just don't agree that $8/lb will be the long term sustaining price mechanism supporting supply/demand.

It's very rare to have any commodity trading at 800% higher than the AISC cost of a mid-tier operation. Those types of margin don't usually exist or in they do, not for a long period without a large amount of supply coming online.

The way to work it out is generally by a bell curved normalised distribution. Essentially most commodities have a distribution of operations in terms of their profitability. Think of it as the "common" grade deposit.
for e.g gold (depending on a lot of factors) had generally said 2-3g/t open pit wide spread is the economic grade for gold. There are hundred probably thousands of deposits with 1g/t average. The price of gold can never reach asymptotic price levels irrespective of demand levels as a wave of those previously marginal just not profitable mines come in. Secondly, mid and majors push their tonnages up to squeeze out the juniors (similar to what occured in IO). There's a general typical grade for economical IO. Lithium for hard-rock probably around 1-1.2%. Rare earth's hard rock around 5% TREO.

This loosely applies to almost all commodities and is why most of the time it really comes down to being in the lower quartile for AISC such that you can temporarily capitalise on those price spikes, but invariably its usually very odd to have such large margin unless you're an outlier for AISC.

In short, i agree demand for copper will increase. I agree that their may be a price pinch/spike in price. I agree that CYM being near term production can capitalise and yes in being in production much better than being a developer as you can't instantly bring supply online. I just disagree that the long term pricing mechanism for Cu will be $8.

I'm happy if i'm wrong, but i personally prefer to work out my upside on conservative figures such that if it stacks up any upside to them is a bonus. View things negatively and prove them good options means reality/bullish outcomes will leave you with lots of upside.

Anyways just wanted to clarify my view on the pricing and think irrespective of price that CYM will be profitable as i don't see sub $2.5/lb returning and given that there is a large opportunity for profits. Happy to proving wrong in the next 5 years on the Cu price, only means better financial outcomes for me if I am.

SF2TH

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I guess what the bulls are thinking is the AISC for the majority of copper miners will be alot higher because they are mining copper which was previously unprofitable. So if you are talking normal distribution the AISC for the majority of miners in the bell curve could be $4 to $6 and CYM and a few others are outliers.

If we use Newcrest as an example the Cadia mine AISC is the cheapest in australia.

However, correct me if I'm wrong but most other gold miners the AISC is closer to $1400au.

so it's kind of irrelevant if 10% or 30%(random number) of producers can mine at $2 if the vast majority have to mine at $4+.

CYM Price at posting: 24.0¢ Sentiment: Buy Disclosure: Held
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Last 4.4¢		Change 0.003(7.32%)		Mkt cap ! $67.08M

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I guess what the bulls are thinking is the AISC for the majority...

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