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Gold/Mining/Energy : Copper - analysis
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To: russwinter who wrote (1226)6/9/2005 10:08:42 AM
From: David Semoreson  Read Replies (1) of 2131
 
Agua Rica NPV of $4.5 billion at spot prices!

Northern Orion has calculated a preliminary, pre-tax, pre-royalties Net Present Value ("NPV") at an 8% discount rate of US$282 million for the life of mine with metal price assumptions for copper US$1.00/lb, gold US$400/oz and molybdenum US$5.00/lb. Pre-production capital payback is estimated at 6.1 years based on the above assumptions. Sensitivity analysis indicates an increase in NPV of:

- US$ 23 million for every US$0.01 increase in the copper price;

- US$ 91 million for every US$1.00 increase in the molybdenum price; and

- US$ 9 million for every US$10 increase in the gold price.

Anticipated cash costs of US$0.23 per pound of copper, net of gold and molybdenum byproducts at the above price assumptions for the life of mine are in the lower quartile of cash operating costs. Cash costs decrease by US$0.003 per pound for every US$10 increase in the gold price and US$0.047 per pound for every US$1 increase in the molybdenum price.

Based on the assumptions outlined above, at current metal prices of copper US$1.55/lb, gold US$425/oz and molybdenum US$37.50/lb, Agua Rica would yield an NPV at an 8% discount rate of US$4.5 billion, a pre-production capital payback of 1.9 years and an estimated cash cost of minus US$1.30 per pound of copper net of byproduct credits.

biz.yahoo.com
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