Its not that hard all and explains where we sit.
Based on 27kt output, and Average spot copper $2.20/lb, and AISC at 1.60/lb
Gross Revenue = $130,680,000 (27,000 x 2,200lb/t x $2.20)
Less AISC = <$95,040,0000> (27,000 x 2,200lb/t x $1.60)
Net = $35,640,000
Less Tax: <$10,692,000>
For the first year most of the tax should be written off through previous years losses bought forward and depreciation of the SXEW.
Less: Taurus $50/t cost of finance: <$1,782,000> (27,000 x 2,200lb/t x $0.03)
Less: Interest on Borrowings 9.25%: <$12,348,750) ($133,500,000 x 9.25%)
Less: Interest on Ovedraft DRC facility (Assume 11.5% interest charge on $25mio): <$ 2,875,000> ($25,000,000 x 11.5%)
Positive Cash: $18,634,250 (Note: If we paid tax we have less that $10mio positive cash) Remember next year we need to pay principle not just interest only, and debt will climb by $25mio for the debottlenecking scope.
Therefore its imperative that we make enough free cash to hopefully offset the debottlenecking cost. I suspect that we will still draw down on the Taurus / World Bank Finance Facility and given they have strove to repay the short term DRC ovedraft, they may continue to do this.
At $2.20 then we are just keeping heads above water. Its all about the copper price....
gltah
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