I don't normally post to CDU although I've held for a number of...

I don't normally post to CDU although I've held for a number of years.

There is misinformation circulating on the CDU thread so here is the opinion of this ancient Earth scientist.

1. The secondary enriched zone containing native copper and chalcocite sits on top of the primary ore body and should be mined first.

2. Low grade ore from the cutback should be stockpiled for treatment once everything has been paid for and either the main orebody is exhausted or it becomes favourable for some other reason. This is standard practice and it's exactly what is being done.

3. Secondary enriched grades were underestimated during the JORCing process for a number of reasons. Firstly, professional caution was in play.
Secondly, the nuggety nature of native copper has a level of randomness in its distribution making it intrinsically hard to estimate.
Thirdly, the friable chalcocite is very easily washed out of the samples and doesn't get measured.

4. JORKing too much ore is a waste of money. Provided the resource has been confidently estimated, enough ore should be JORKed for two or three years production and to optimise pit design.

5. Coproduct has already been mined so only needs to add some value to be economic. Transport costs may be the key. Magnetite is straightforward to separate and will have value depending on purity. Sulphur and phosphorus make it useless for steel production. Cobalt is a high value product and even a small quantity will pay for its own transport once enough has been accumulated. Gold and silver coproducts are normally sold with copper concentrate as a premium to the price.

The expected price for the native copper product is getting plenty of discussion but some of it is a little misinformed. Smelters do pay a premium for metallic copper feed because it makes the smelting process easier. However the premium is over the ore price, not over the refined metal price. Only if there were substantial precious metal credits would the premium match the refined metal price.