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50% profit on insitu tonnes is pretty aggressive, just a couple of factors you are missing.
Resource Recovery - Not a real term, but something that is used to evaluate the affective design of a reserve typically 85%-90% of resource. 10%-15% are tonnes that could not be designed for technical or economic reasons. This is actually missing form the FS but that is something a lot of juniors do.
Internal dilution- Waste or uneconomic sulfide material inside required to be mined with economic material. Typically this is between 10%-15%, really dependent on geologic complexity. This dilutes the head grade. I believe this was also missing in the FS.
Mining recovery - Unplanned material left behind as a result of under break and mucking, industry standard on a new long hole mine would be in the 97% range.
External dilution- Unplanned over break, uneconomic material that dilutes grade< with the strong host rock should probably be in th5% range
Metallurgical recovery - Don’t remember what the FS said and if it was based on bench tests (OK) or a pilot plant (Good) but would probably be 90%-95% for Ni and in the high 70's or low 80's for the precious metals
Freight - Cost per tonne to ship conc. These terms are estimated in the FS cant remember what they are but probably 200-250 dmt
Treatment charges - Smelting charges - again these are estimated in the FS prob around 50$ per tonne of conc.
Payability - % of metal in conc that is paid by smelter, usually in the 95% region for Ni would be a little lower for the precious metals
The opex on its own will probably be 110-120$/t
Royalties will probablt be 3-5% off the top when its all said and done
I still struggle to understand mining taxes so I can no comment on these
Edgy,
I am 99% sure the numbers would have to be in millions. Although not important your breakdown for the costs centers are a little.
Typically for an Underground Ramp mine the breakdown in costs would be the following
Mining Capital costs would include: All underground mining equipment, Portal Development, Ventilation fans and raises (heaters if required), All underground Electrical Infrastructure Underground Capital development (typically all development in waste required to produce tonnes in the following year), Underground Infrastructure (refuge stations, Shops, escape ways etc), All underground Dewatering and Process water, Backfill infrastructure (although this can be covered by the Processing side) etc. 195 Seams very low in my opinon
Proceessing: Crushing, Grinding, Flotation, Dewatering, Electrical, Process water and Con Storage etc. 113 seams low considering the concentrator is underground.
Site-Infrastructure: Road Access, Landing strip, Housing , Explosives plant, Sewage treatment plant, Effluent treatment plant (although this can be included in the processing) etc.
In-Directs: EPCM (usually 15%-20%), Freight, First Fills, Vendor Reps,etc
Working Capital: Cash on hand for operating costs between end of project phase and sale of con (usually 3-6 months)
Hebe,
XPS is a processing consultant I wouldn't read too much into the doing work for anyone just means they had the best bid proposal.
I don't want to rain on your parade but why would you use in-situ valuation for anything? It doesn't take the realities of mining, concentrating and smelting into consideration. I believe that the shares of Noront should be worth more then .20$ but to throw out in-situ value without any cost or recovery context is meaningless.
It would be like saying
Mass of Earths Crust
191,300,000,000,000,000,000
Average Ni content
0.0000002%
Tonnes of Ni
382,600,000,000.00
Value
5,050,320,000,000,000
Unless I missed something below is a rough estimate of the LOM Revenue and OPEX. I uped the expected OPEX to include freight and treatment charges because I am too lazy to work out the NSR. Shouldn't be too hard to figure out the NPV using what ever capex you feel is appropriate and an appropriate life of mine.
Tonnes
Ni
Cu
Pt
Pd
Au
Measured
5,346,000
2.08
1.07
1.04
3.55
0.2
Indicated
5,643,000
1.5
0.89
0.94
3.27
0.2
10,989,000
1.78
0.98
0.99
3.41
0.20
Infered
8,966,000
1.1
1.14
1.16
3.49
0.3
MOZ Resource
19,955,000
1.48
1.05
1.07
3.44
0.24
Measured and indicated
Resource Recovery 90%
9,890,100
1.78
0.98
0.99
3.41
0.20
Planned Dilution 10%
10,879,110
1.62
0.89
0.90
3.10
0.18
External Dilution 7%
11,640,648
1.51
0.83
0.84
2.89
0.17
Mining Recovery 95%
11,058,615
1.51
0.83
0.84
2.89
0.17
LOM Head Grade
1.51
0.83
0.84
2.89
0.17
Metal Recovery
80%
87%
82.30%
74%
77%
Metal Recovered
133,956
79,908
7,644,800
23,682,537
1,446,922
Metal Payability
90%
75.00%
74.20%
74.20%
74.20%
Payable T's or g's
120560.2121
59931.0089
5672441.239
17572442.27
1073615.849
Payable lb's and Oz's
265,232,466.58
131,848,219.58
200084.0198
619832.7563
37869.65186
Aproximate price
6.2
3.1
1300
700
1200
Revenue in '000
$1,644,441.29
$408,729.48
$260,109.23
$433,882.93
$45,443.58
Estimated Cost 110$ per tonne
$1,216,447,684.65
Estimated Revenue
$2,792,606,510.86
MOZ Resource
Resource Recovery 90%
17959500
1.48
1.05
1.07
3.44
0.24
Planned Dilution 10%
19755450
1.34
0.96
0.97
3.13
0.22
External Dilution 7%
21138332
1.25
0.89
0.91
2.93
0.21
Mining Recovery 95%
20081415
1.25
0.89
0.91
2.93
0.21
LOM Head Grade
1.25
0.89
0.91
2.93
0.21
Metal Recovery
80%
87%
82.30%
74%
77%
Tonnes Recovered
201,416
155,939
14,963,310
43,480,568
3,217,751
Metal Payability
90%
75.00%
74.20%
74.20%
74.20%
Payable Tonnes
181,274
116,954
11,102,776
32,262,581
2,387,572
Payable lb's and Oz's
398,803,631
257,298,864
391,628
1,137,998
84,217
Approximate price
6.2
3.1
1300
700
1200
Revenue in '000
$2,472,582.51
$797,626.48
$509,116.67
$796,598.62
$101,060.17
Estimated Cost 110$ per tonne
$2,208,955,641.75
Estimated Revenue
$4,676,984,452.21
Xstrata exists under Glencore who bought them. What's in a name.
That’s like saying Inco is the same as Vale or Amoco is the same as BP. There is almost no senior management left from Xstrata after the takeover. I am not saying it is impossible I am just suggesting the odds are drastically lower now that Glencore has taken Xstrata over.
"We are afraid of Greenfield" projects, Ivan Glasenberg said in an analyst conference call. "We will try to avoid them as long as possible; I'm not saying forever," he added, but he said the company foresees more attractive returns from brownfield expansions and mergers and acquisitions than investment in greenfield projects