xtrata roseby drilling results, page-45

I forgot to mention that I used a copper price of US$3.80 per lb but did not cater for the exchange rate (because lately it has been bouncing around parity).

With an exchange rate of A$1.07 you get a SP valuation of $0.75 for the 1.8% NP recovery. At 3% you get 1.24. I think 3% is more reasonable. If I were to lower anything it would be the price of copper.

Also note that I did not include the expected gold recovery.

On the exchange rate; predicting it is a mugs game but for our purposes it doesn't really matter. If it goes up then the US dollar has gone down and commodities prices tend to go up in such a scenario. A big, big bonus would be if the A$ declines but commodities remain constant or increase. This could occur if the RBA board gets out of bed, looks around and realises they are incompetent. I think rates in Australia could decline rapidly this year. Sure banks won't drop their mortgage rates but they will on deposits meaning that the carry trade loses appeal and the dollar drops.