From The AustralianUniversal eyes greater gain on mine Kevin...

From The Australian

Universal eyes greater gain on mine

Kevin Andrusiak | April 21, 2008

UNIVERSAL Resources is expected to soon release a revised outlook for its Roseby copper project near Cloncurry as the outlook for the red metal continues to shine on the upside.

The improved forward price curve for copper should further sweeten the Roseby appeal and is expected to generate life-of-mine operating surpluses greater than the $970 million previously forecast by Universal in its "definitive feasibility study".

Xstrata holds an option to acquire 51 per cent of the project, which has copper reserves of 255,000 tonnes.

The option runs out in June 2012 and Xstrata boss Charlie Sartain said recently that the Swiss-based company would need to find more resources to feed its Ernest Henry mill as it closed its open-pit operations.

The DFS showed an estimated net present value of $282 million for Roseby, which equated to 82c per share.

That figure is forecast to rise to well over $300 million when Universal releases the upgraded DFS summary some time this week while the payback year -- how long it will take Universal to recover capital costs -- is expected to be slashed to just over two years based on a long-term copper price of around $US2.50 a pound.

Also expected to be lifted higher is the internal rate of return, which stands at 32 per cent over an initial mine life of 12.5 years.

However, while the rising copper price has provided a sweet spot for Universal to ramp up development of Roseby, the company still needs financing of around $230 million to fund the project.

The Perth-based company is believed to be already in talks with financiers and suggested that it would take less than two years to be in production once construction began.

Universal is anticipating a 4 million tonne a year mining and processing operation with a mill feed of both copper oxide and copper sulphide ore at the project, which is 65km northwest of Cloncurry.

Universal shares have nearly halved over the past 12 months to where the company's market capitalisation is a lowly $22 million. The shares will begin trading this morning worth 6.4c.