Thanks for posting the IPJ scoping study release. Got to get up early these days to be first poster!
<<The cash cost per pound of copper averages US$0.48 over the 20 year life of the project. Moreover, the first 800 million pounds of copper, almost all of which will be produced in the first four years, has a cash cost of US$0.40 per pound. >>
Costs are approximately the same to better for the scoping study compared to previous numbers.
<<The economics of the project are robust with a rate of return of 77% and a pay-back period of 10 months under the first option, (ie using Minoro equipment). The project has a discounted net present value of US$362 million (at 10% discount rate) using a copper price of $1.00 per pound. At US$0.80 per pound of copper the NPV is US$196 million. Under the second option, (ie all new equipment), the project is also economically attractive with NPV's of US$232 million and US$64 million respectively. >>
Years ago I worked for Noranda in one of their subsidiaries, at that time 26th in ranked size. When the budgeting process took place each year (for PROJECT approval), one of the determinants was rate of payback, we were approx 30 months and the longest projected payback, most were under 20 months for other subsidiaries. Must conclude that 10 months PB (if I am reading this correctly) is exceptional in the mining industry.
Gold Newsletter's "Mining Share Focus" makes a statement with regard to Hinoba-an/Minoro deal: "Annual cash flow of US$20 million for a company with less than 30 million shares out could easily translate to a share price in excess of C$8.00..."
Today should be very exciting as we progress towards the likely closing of the Minoro deal and possibly find a sale for the 40% IPJ carried interest. Some might say these postulations are a bit premature, however, LIKELY is the key word.
What are your conclusions regarding this release.
Best regards,
Ron E |
