RE:RE:RE:RE:RE:So when is take out offer by RIO?It is a very complicated projection.
The best information can be found in the newly released 2016 Technical Report filed by TRQ on Sedar.com. It is not set out as simple NSR's in most instances. Recommend a long study of the same, with a sceptical eye to the fact management is being influenced by the most likely buyer of the 49% TRQ float, and arguably has an agenda to be vague on upside, loud on risks, conservative assumptions, and alternate scenarios.
The default long term prices for copper and gold used in the models are $3lb and $1300oz.
The Report has numerous production scenario grids showing NPV sensitivities to differing metals prices and discount rates.
Each deposit is discontinuous as to metal content, so each deposit blends different ores, and the deposit mining will blend ores as well.
Gut feel is the Oyu pit returns approx $26 NSR's. The block caves are more dynamic, with higher grade ore having NSR contributions well over $100, and the resource models using $15 approx as the zero-value cut-off (as opposed to $7 or so in the pit. But appreciate the deposits are highly diverse within themselves - perhaps the average Hugo North NSR at $3 cu and $1300 ag will come in from around $80 to $120 tonne. I have a low degree of confidence in the accuracy of that estimate because of the number of variables, especially metals prices.
Most of the economic modelling is done by NPV calcs and the NSR's underlying are not clear. However it looks like costs are in the $8 average for the open cast and $16 to $25 for the block cave - And if a reasonable discount rate in the 6% range or so is applied, and metals prices surprise to the upside, the results are very promising. In particular gold credits at Hugo North and HNE really demolish net copper costs when calculated as a net mining credit.
cg