GobiMin Inc. V.GMN

400 + million lbs of copper

[paljoey]

The Yanxi Copper Property  has over 400 million lbs of copper in its 43-101 reserves.
It is the type of Chinese copper  deposit that can be placed into production quite rapidly, at very low  development cost.
Cash costs should be in the $1/lb range, given the grade and the fact that it can be mined by low cost chinese open pit mining.
 Yanxi is a development option for Gobi, should the demand profile for copper be V-shaped.
That is, a fast recovery in copper prices following a fast collapse.
China is the world's largest copper consumer, driven by the fact that 20 million Chinese enter the middle classes each year.
Given the huge stimulus packages recently announced not only in China but in Europe and eslewhere, such a V-shaped recovery from current prices of $1.45/lb might not be all that unreasonable.

However, Gobi management are  more focussed on high grade copper deposits in China and have several under tight DD.
The rationale here is that high grade copper deposits in China have cash costs that are in the $0.50/lb range.
Such a mine would be profitable in all parts of the economic cycle, as copper can hit lows of sub-$1 levels for short periods of time.
In my opinion, it is this aggressive pursuit that is driving the recovery in Gobi's share price.
If successful, Gobi will rapidly move back to its former highs.