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Gold/Mining/Energy : Copper Fox -- Ignore unavailable to you. Want to Upgrade?

To: ElephantAnalytics who wrote (9063)

1/5/2015 1:00:18 PM

From: dsikorsk

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Read Replies (1) | Respond to of 10654

IIRC another large portion of the differences between 2008 and 2012 was metal recoveries which I believe could make up a large chunk of the economic difference. Metal recoveries for 2012 can be seen here:

web.tmxmoney.com

"Notes to Mineral Resources Tables
...

CuEq grade cut-offs were used to report the mineral resource estimation as a function of copper, molybdenum, gold, and silver. The CuEq is based on Tetra Tech's long-range metal prices of US $2.97/lb for copper, US $16.80/lb molybdenum, US $1,256.00/oz gold and US $20.38/oz for silver and metal recoveries of 60.90% for molybdenum, 70.6% for gold and 43.4% for silver. No copper recoveries were applied to the copper equivalent grade;"

whereas metal recoveries for 2008 are here:
copperfoxmetals.mwnewsroom.com

"MILL RECOVERIES

Mill recoveries are projected to be: copper to the copper concentrate: 88.4%, molybdenum to the molybdenum concentrate: 71.3%, gold to the copper concentrate: 81.3%, silver to the copper concentrate: 70.7%.

The grades of the copper concentrate are expected to be: copper, 33.85%, gold, 21.9 g/t, silver, 158.3 g/t.

The grade of the molybdenum concentrate is 50.0%, and assays 368 ppm rhenium.

The copper grade in the copper concentrate is higher grade than industry standard chalcopyrite concentrate because of the bornite content and should command a premium from smelters and refiners seeking this product. The rhenium content of the molybdenum concentrate is expected to possibly command a premium."

Looks like moly, gold and silver recoveries went down 10.4, 10.7 and 27.3% respectively. Now that's a large chunk of your revenue down the drain which I would think would shave a "tonne" off the NPV (no pun intended). So to me how can 4 years pass and the assumed metals recoveries actually drop? It's not like the deposit changed or humanity got worse at resource extraction. Were they too optimistic in 2008? Do BFS's have more stringent requirements for this? Who knows but this is just something else to add to the long list of things that don't add up...

To: ElephantAnalytics who wrote (9063)

1/5/2015 10:03:53 PM

From: explorationguy

Read Replies (1) | Respond to of 10654

I hadn't realized the op costs would produce such a difference but it demonstrates you have to do the math. I took the metal amounts and the metal costs used in the economic analysis for 2008 and 2012. Once again the number is surprising when you do the calculations. Here's the results in a table:

	2008			2012
	metal	price	value	metal	price	value
cu(lbs)	4760000000	3.12	14851200000	4875000000	3.25	15843750000
mo(lbs)	255200000	33	8421600000	214900000	14.64	3146136000
au(oz)	4500000	692.85	3117825000	4210000	1445	6083450000
ag(oz)	32500000	13.09	425425000	25100000	27.74	696274000
			26816050000			25769610000
			26.81605			25.76961
				-1.04644

It wasn't obvious to me that there was $1 billion less metal value in 2012 compared to 2008. The significantly higher op costs and less metal value in 2012 would drive CUU to select a bigger project to try to offset this problem. Economies of scale could help with the op costs but not nearly enough in this case. Teck has signalled they are examining a smaller size project so we'll see what information is released in the next JV meeting later this month. Thanks for your contribution.