why cdu has to be a lt investment, page-9

The AGM preso (Int roadshow slide deck) contained the Preliminary Fin model;

Based on 10 year life of mine;
- Project revenue…………………………….. $3.99 Billion
- Operating project costs …………………..$1.22 Billion
- Pre-tax Net operating cash flow…………..$2.77 Billion
- Pre-production capital……………………..$0.25 Billion
- Pre Tax NPV (Using 10% discount rate)… $1.25 Billion
- Internal Rate of Return…………………….104%
- Mining and processing costs……………..$0.81 per pound
- Life of Mine Strip Ratio……………………..3.16 to 1
- Mill throughput………………………………3mt per annum

Key Input Assumptions to Preliminary Financial Model;
- Average metal prices;
Copper = USD$3.25 per pound
Cobalt (+ pyrite/sulphur credit) = USD$26 per pound
Gold = US$1600 per ounce
Magnetite = USD$220 per tonne
- Average Metal Recoveries;
Copper = 95%
Cobalt = 90%
Gold = 80%
Magnetite = 55%
- USD/AUD exchange rate = 0.90
- May 2011 Resource Estimate (30.3 Million tonnes @ 1.7% CuEq)
- Mining costs = 42.29 cents per lb
- Processing costs = 38.92 cents per lb
Transport costs to Port of Townsville = $50 per tonne of concentrate
- Concentrates sold FOB Townsville under off-take agreement
- Smelter (treatment & refining) = USD$0.15 per pound
- Royalties = 4.0% of gross revenues
- Mining dilution = 5%
- Mining loss = 5%
- Mining rate maintained throughout 10 year mining life - requires increased waste dump size and amendment to current EIS after year 6 (currently underway).

Notes on Preliminary Financial Model
The Preliminary Financial Model was compiled from data and information developed from independent expert consultants, together with contributions from in-house consultants and CuDeco employees.
Subsequent to pit optimisation studies and development of preliminary mining schedules, a proposed increase in the mining rate has been determined to provide superior project economics.
Amendments to the currently approved EIS is required and is currently underway.
Proposed changes to mining rates will impact current waste-dump designs and also includes the creation of a stockpile of low-grade ore that would otherwise have been discarded on the waste dumps.

Potential Upside - Las Minerale & Rocklands South
-Speculation Native Copper Missed in RC Drilling
large native copper nuggets pushed aside in soft matrix
-Speculation Chalcocite Lost in Diamond Drilling
soft sooty chalcocite potentially washed out of voids during diamond drilling
-Larger Than Estimated Shallow Oxide Zone May Exist
void in drilling between angled and vertical holes means expected “flute shaped” oxide cap was not included in resource estimate.