use of hackett infrastructure
It would be interesting to try to determine how much toll Sabina would have to leverage future infrastructure put in by Xstrata for purposes of developing Back River.
It might not be all that much. I believe developing Hackett is projected to have a price tag of $1 billion.
You have got to figure that much of that $1 billion is for stuff that is mainly geared for Hackett. Cost of mill at Hackett obviously is not relevant. Cost of the port probably won't have much bearing either since the main purpose of the port is to haul off Ag/Zn concentrate, whereas the product of the Back River mine will presumably be gold dore bars.
So anyway, the infrastructure that Back River may be able to get the benefit of probably isn't more than about $200-300 million.
And let's say Hackett produces $15 billion of product and Back River produces $6 billion. Presumably Back River's fair share is then about 30% of $200-300 million, let us say 30% of 250 million or about $80 million total.
To be really conservative let us round that up to $100 million.
So developing Back River will involve building a mine and spending perhaps $100 million on shared infrastructure. On a resource base of $6 billion, the $100 million is not very onerous.
Of course, commodity prices are liable to go up, but if that 30% figure is about right, it will probably not change much since both Hackett's NSR and Back River's will go up with rising commodity prices. And probably so will the cost of infrastructure, so the fraction of shared infrastructure cost in terms of value of minerals produced at Back River will probably be fairly constant regardless of commodity prices.
Of course, if they find more gold, that will reduce the proportionate cost.