I’ve been playing around with a few numbers, and know why Cudeco need to get on with exploration, they simply don’t have enough copper for more than the first few years. This will take a bit of explaining and hopefully it makes sense!
Rocklands existing JORC plus 20% = for the first 19mt 280,000t of copper. Probably only 92% will be recovered = 257,600t Cu over the19mt deposit of the measured resource. The 19mt of the measured resource is meant to last over 6 years so no matter how you cut there is only 257,600 tonnes of copper or 40,673 per year from the high grade areas allowing for 20% over JORC, in extra Ncu.
If you take 90,000 tonnes in DSO and concentrate in the first year, you only have 167,600 left for the next 5.3 years or 31,425t/yr. That is only worth $A177.8m in total revenue from copper sales. So just having a good first year of 90,000 tonnes of DSO and concentrate, massively depletes what is available for the following years. Once we get past the measured resources and into the indicated, we are into .68% copper, or 20,400t/yr of copper @3mt/a processing. This will only provide revenue of around $A113.6m and this is at 100% recovery, which simply wont happen!!.
So where does the money come from to develop a larger processing plant come from, if any dividends have been paid at all?
I do not believe the mining grades so far, to be much above JORC or CDU would have to release the number, due to continuous disclosure, so allowing the first19mt of the measured resource to be 20% above JORC is generous. ` Let’s look deeper, the entire measured and indicated JORC of 181mt at .25% Cu has a total copper content of 452,500t Cu. Allowing 20% extra for the first 19mt adds 47,500 tonnes of copper to the total, bringing the total up to 500,000t Cu, but the extra 20% is all mined in the first 6 years.
If we do our sums, after the first 6 years, we have mined 257,600 tonnes cu, which leaves 242,400 tonnes in 162mt of ore, a grade of .14%!!! Even a 10mt/a plant will only produce 14,960 t/a!! It’s not worth it unless they find a lot more copper! I have not allowed for Au, which is not high, nor Co and Magnetite.
The magnetite resource at current prices would be marginal at best even allowing for rail transport, the Co/pyrite concentrate likewise, but they don’t have rail transport, nor does it look like happening ‘soon’.
I may take a while to get back to any respondents as we are currently 800 Nm NE of Sydney in the Pacific with limited internet.
Please holders, pick up where the numbers are wrong, with some evidence.
I know believe that if CDU mine/sell a lot in the first 2 years, then there is really not going to be any profit later on.
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