RE: Valuating CUU using cost to produceThe breakeven cost is at .12% eq on a ton
Using .2% jacks up the payback substantially. Notice there is not much change between .12 and.2 in total pounds. Given the prices used we can go to .3 without taking much off the table. What this tells us is the have price flexability more so than almost every other deposit currently being worked. Applying current prices to the scheme reveals that even at .12 the deposit is very profitable.
On a side note:
I'm doing a side by side comparison to galore this weekend and it's showing some substantial differences in the pocket book. I'm using the first 10 years as the base line. Galore would be far riskier and shows much less profit. The interest costs alone are big. But more important as Elmer has stressed is the remaining profit. Factor in the slower mill rate and the 75 meters of glacial til and there's a billion dollar difference. So while they have better head grades the cost to sell a pound is just that much higher. This does not take into account the 700 million for the power and tunnel. It's looking more like 5.5 billion. That means they must be able to process the Probables.
I plan to discuss the technical aspects of M&I vs P&P. I think it will come down to this basis. Consider this, Galore has much higher silver. If silver doubles like I think it will then Galore can go ahead. They will start narrowing the gap on us. I don't look at gold doubling because that just means dollars are on the way out but silver needs to restore the impalance so I can look at that.
Table-5: Sensitivity of Mineral Resource to Cut-Off Grade
| | | | | | | | | | |
| Resource | Cut-Off | Tonnage | Copper | Molybdenum | Gold | Cu Eq. | Contained Metal |
| Category | Cu eq. | (Million Tonnes) | (%) | (%) | g/t | (%) | Cu (Mlbs) | Mo (Mlbs) | Au (Moz) |
| Measured | 0.10% | 40.4 | 0.36 | 0.023 | 0.24 | 0.61 | 319.9 | 20.5 | 0.32 |
| | 0.12% | 40.4 | 0.36 | 0.023 | 0.24 | 0.61 | 319.9 | 20.5 | 0.32 |
| | 0.15% | 40.4 | 0.36 | 0.023 | 0.24 | 0.61 | 319.9 | 20.5 | 0.32 |
| | 0.20% | 40.3 | 0.36 | 0.023 | 0.25 | 0.61 | 319.6 | 20.5 | 0.32 |
| | 0.25% | 40.2 | 0.36 | 0.023 | 0.25 | 0.61 | 319.1 | 20.5 | 0.32 |
| | 0.30% | 39.4 | 0.36 | 0.023 | 0.25 | 0.61 | 316.0 | 20.3 | 0.32 |
| Indicated | 0.10% | 995.3 | 0.27 | 0.017 | 0.17 | 0.44 | 5855.1 | 365.7 | 5.55 |
| | 0.12% | 994.9 | 0.27 | 0.017 | 0.17 | 0.44 | 5,854.5 | 365.7 | 5.55 |
| | 0.15% | 992.5 | 0.27 | 0.017 | 0.17 | 0.44 | 5850.1 | 365.5 | 5.54 |
| | 0.20% | 971.2 | 0.27 | 0.017 | 0.18 | 0.45 | 5795.7 | 363.2 | 5.50 |
| | 0.25% | 898.6 | 0.28 | 0.018 | 0.18 | 0.47 | 5558.3 | 353.0 | 5.29 |
| | 0.30% | 785.8 | 0.29 | 0.019 | 0.20 | 0.50 | 5105.9 | 333.7 | 4.93 |
| Measured | 0.10% | 1035.7 | 0.27 | 0.017 | 0.18 | 0.45 | 6175.0 | 386.2 | 5.87 |
| & Indicated | 0.12% | 1035.3 | 0.27 | 0.017 | 0.18 | 0.45 | 6174.4 | 386.2 | 5.87 |
| | 0.15% | 1032.9 | 0.27 | 0.017 | 0.18 | 0.45 | 6169.8 | 386.0 | 5.86 |
| | 0.20% | 1011.5 | 0.27 | 0.017 | 0.18 | 0.46 | 6113.7 | 383.6 | 5.81 |
| | 0.25% | 938.8 | 0.28 | 0.018 | 0.19 | 0.47 | 5871.1 | 373.0 | 5.60 |
| | 0.30% | 825.3 | 0.30 | 0.019 | 0.20 | 0.50 | 5411.0 | 353.4 | 5.23 |
| Inferred | 0.10% | 301.5 | 0.24 | 0.011 | 0.14 | 0.37 | 1562.4 | 70.3 | 1.38 |
| | 0.12% | 301.3 | 0.24 | 0.011 | 0.14 | 0.37 | 1562.1 | 70.3 | 1.38 |
| | 0.15% | 299.5 | 0.24 | 0.011 | 0.14 | 0.38 | 1558.5 | 70.2 | 1.38 |
| | 0.20% | 283.6 | 0.24 | 0.011 | 0.15 | 0.39 | 1517.2 | 68.8 | 1.34 |
| | 0.25% | 244.1 | 0.26 | 0.012 | 0.16 | 0.41 | 1385.4 | 64.2 | 1.24 |
| | 0.30% | 186.8 | 0.28 | 0.014 | 0.17 | 0.46 | 1150.6 | 56.6 | 1.05 |