RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:TREVALI EXTENDS ZINC HEDGING PROGRAM OUT TO END OF 2021Petz, let's just take the 2019 total AISC for Caribou of $1.17. Caribou is ALWAYS going to have problems, so using anything less than $1.17 is unrealistic. Add $.10 for a total cost of $1.27. Yes, there would be some care and maintenance savings. If the mine can produce 75M pounds of zinc, and the care and maintenance savings is $6.7M, then the savings per pound would be $.09. However, if you are going to give credit for care and maintenance savings, you need a more realistic number for restarting the mine. You are probably looking at closer to $25M. Spread that over 2 years for $12.5M per year. That would add $.17 per pound. If the mine did stay open more than 2 years, that cost would go away.
So you are looking at a breakeven of $1.17 + $.10 overhead - $.09 care and maintenance savings + $.17 reopening cost = $1.35
I keep coming back to $1.35 as breakeven. I still maintain that you need $1.50 zinc fully hedged for 2 years to make reopening worth the trouble. That would give the company added profit of 75M pounds x $.15 = $11M profit per year for at least 2 years.