In the recent Rock Stock channel interview, CE half-joked about mining Cancet's existing ~3mt @ 1.4% resource as a DSO operation (direct shipping ore). It's shallow, high-grade, with great access, so entirely feasible. Stupid, but feasible.
What things might look like if management stopped all drilling and did nothing for the next 2.5 years except work on environmental permits for Cancet? How much money would be made just digging up what we've already found, and selling the ore?
Background:
- In October CXO sold 1.4% ore for 950 USD /t.
- That's 678 per 1%, or 4071 for 6%
- If SC6 market price is 6500 /t, we can say CXO sold ore for a 37% discount on the concentrate price
2025:
- 1mt ore mined
- Macquarie SC6 price 5825 /t
- Discounted 37% = 3649, multiply by 1.4/6
- ore price 851 USD /t
- opex, say 500 USD /t
- operating profit 351m USD
2026:
- 1mt ore mined
- Macquarie SC6 price 5125 /t
- ore price 749 USD /t
- operating profit 249m USD
2027:
- 1mt ore mined
- Macquarie SC6 price 4350 /t
- ore price 636 USD /t
- operating profit 136m USD
2028:
- pack up and go home
- distribute 730m USD or ~1bn AUD as dividends
Worst case scenario: this is still a 5 bagger from here. Just my opinion, not advice! DYODD
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