So what's Teck really paying for 75% of all this....when you have others fighting over and paying 900 million for 18% of Quellaveco....
I'll answer this myself:
Teck can earn 20% by spending 1 x expenditures = $85 million
($17 million comes back to Teck, $68 million goes to CUU)
Teck can get 40% by spending 3 x expenditures = $255 million
($102 million comes back to Teck, to Teck, $153 mikllion goes to CUU)
Teck can get 75% by spending 4x expenditures = $340 million
(So for an extra 85 million Teck gets 35% more.....)
($255 million comes back to Teck, $85 million goes to CUU)
Now take a step back and look at these numbers...and keep in mind some company was willing to pay 900 million for 18% of Quellaveco.
40% is the more expensive of the 3, almost double
20% vs 75% = 68 million to CUU vs 85 million to CUU, difference is a meesly 7 million to get 50% more of the project.
Looking at 75%, the financing and the expenditures are part of the same...Teck is actually financing itself for $255 million (the amount of money required to earn in 75% that they would spend anyway to bring to production).
And when looking at the Capex numbers,....Teck really only pays 75% of it since CUU must pay back 25% of the capex once in production. So takle those Capex numbers x 0.75
Teck also has the opportunity to sell a % form it's 75% and actually end up paying a big fat ZERO in Capex....
And if Teck just takes 75% ( no buyout), majors will be all over us since all they have to do is wait and let Teck do everything.
In any of the 3 options...Teck is spending $85 to $340 million. (CUU play money)
That is small when comapred to 900 million, mitsubishi paid for 18% of Quellaveco in Peru.
How much of that play money does CUU really need to upgrade the 171mt in the pit and move up the recovery %..... 10-15 milllion max ? What value does this unlock...how many years does it add to teh mine life (5 years), it's a given.
And the Feasibility pit is only 50% of the Resource Estimate and teh Resource Estimate is only 50% of the Paramount zone.
When looking at it this way it's starting to look like 104 year mine life here....at only 400m depth.
The best grades are below 400m and it was still open at 800m...
And we didn't even touch the Discovery zone..
Teck knows all the above and more.
So those still looking at the NPV...PLEASE...get your nose away from the tree truck and start looking at the forest.
