Capex for new copper projectsFaraday Copper a PEA on a copper project in Arizona in May 2023. The estimated capex for an open pit copper that would produce 106 million lbs. of copper per year was US$798 million, which works out to US$7.52 (C$10.17) per annual lb. of copper production. The mine has to go through a complex permittting process, which TD Securities analyst estimate will takeat least 5 years and then will have to raise almost US $800 million to finance to the production stage. The company has a market cap of $104 million and TD recomends it as a buy with a price target of $1.15 (twice the current price). Antofagasto (a current producer) recently announce that they had borrowed US$2.5 billion to expand their Centinela Mine by 144,000 tonnes/annum. This works out to a capex of C$ 10.64/lb. of annual capacity.
ARG has a market cap of $246 million and produces 60+ million lbs. of copper/annum. That works out to $4.10/annual lb. of capacity. At $10/annual lb. of capacity ARG should be trading at around $3.60 and even at that level, the shares would be yield north of 3%.
The shares are grossly undervalued.