Post by
NiN777 on Mar 15, 2019 8:44pm
Q42018 results
Those results were awesome for a project of this scale delays and or cost( cost is still good) overruns are expected. That mine wont be ramped up before 2025, there could be issues in the block caving who knows, there are some inherent risks. The fact is that P/E ratio for the potential growth in revenue is laughable, the stock will keep trading sideways and Rio will make sure they keep a lid on the equity price. This mine is like a smaller Grasberg without the violence against locals, there metrics for copper seems to be rubbish, it seems that whatever gold grade they mine= operating profit. The power plant is a non-issue since it will bring the operating cost down and likely has a 10 to 20% IRR with a longer payback time. It's very hard to put a price tag on Oyu Tolgoi but when copper price shoot back up to 4$, the bottom we're in right now will look like a blip on the radar. I dont think it's a value trap otherwise rio would taken a write off and shelved it.
Comment by
Nosleep on Mar 16, 2019 12:23am
agreed, they certainly wouldn't be building a power plant if it wasn't moving forward, it's a big damn mine, doesn't always go the way we hope it will. Nosleep