RE:RE:RE:RE:financial results
You have to understand the real projected NSR's to come from Hugo North and HNE at spot metal prices. Rio isn't stupid - full ramp-up production for Hugo North will be 33 million tonnes per annum, that will produce an average of $550 million in gold (@$1500/oz) and $3.5 billion in copper (@ $3.50/lb), say $4 billion gross metal production. All in sustaining costs are around $1.25/lb copper or less than 30% gross annual proceeds. They will generate over $2 billion net, probably closer to $3 billion free cashflow annually to pay back debt and capital expenditure, and if copper and gold prices rise further the leverage is incredible.
Mongolia has not put up a nickel and already had lots of downstream benefits and employment, gdp boost through suppliers, taxes and royalties. They will pay back their debtvfar faster than the sad sack story they are trying to sell.
They are fighting tooth and nail for every additional point not because of the true likely timing of payback, but because it is so valuable to them. Rio's pushback is equally hard for the same reason. But the economics are hugely robust, the reserves will continue to grow,the deposit is a monster.
The Technical Reports are all on TRQ's website. They have nice executive summaries in each.
Look at the metals prices they are using. It is in both Rio and Mongolia's interests at this time to make the OT project look poor. They harp on costs in their NR's and public pronouncements, are careful to make full disclosure buried in those long, dull technical reports, but they won't repeat or talk about projected net revenues or profitability, and how these cost overruns while substantial against cost estimates, are still paid for by projected cash flows without much impairment of the total average net revenues over a very long mine life - once Lift 2 Underground and Heruga are included, maybe 70 years or more, and the exploration and expansion of the deposits is open in all directions with many additional targets. This is a multi-generational asset.
They want to own it all. Buyers always try to point out faults and downsides to sellers. Don't be fooled by either of them.
cg