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Gold/Mining/Energy : Copper Fox
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From: explorationguy12/11/2014 11:33:42 AM
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I've found the FS for QB2 and noted some reasons why Teck grabbed SC. It wasn't just because it was cheap since there are always cost obligations on properties so resource companies don't collect them unless there is potential for development. The document is available on SEDAR for Teck Resources dated June 8,2012. I don't believe it's possible to post a link to documents on that site. Here's the key table:


These are post tax only(no pre-tax was presented) and the base case is most appropriate given the current price of cu. Note that the NPV is negative. QB2 is most sensitive to cu prices whereas SC is most sensitive to exchange rates. I tried to estimate SC post tax and thought briefly we were more economic right now but then realized that the drop in cu and au metal prices is additive. SC is currently negative NPV and about 4% IRR on a post tax basis. A couple of key points. Teck has the in-house capability to carry out a full FS. The economics of QB2 are not wildly better then SC on a post tax basis. If gold prices recover and cu stayed even then SC could look better. Right now neither project looks particularly good but Teck will do everything they can to prepare them to become viable options when conditions improve.
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