Graffiti: PearlsThe last five mines on your list are in Zambia. The first three are Congo. Tenke Fungurume is probably the most recent comparison. As you probably know already, it's copper-cobalt. At $25 lb, cobalt is eight times more valuable than copper. In terms of copper equivalent, total resource = 62.73 billion lbs copper + 6.89 billion lbs cobalt. The copper equivalent for cobalt (x8) = 55.12 billion lbs. Total copper + equivalent =
117.85 billion lbs.
The grades are similar to Kamoa-Kakula 4.9% measured and indicated, 4.2% inferred. Once again this is copper equivalent. The important thing is that TF is OPEN PIT. This isn't some narrow, gently sloping tabular deposit, requiring room and pillar underground mining.
Despite this, both Freeport with 56% of the project, and Lundin with 24% sold to the Chinese for $2.65 billion and $1.14 billion respectively. Lundin had first option to buy, but instead reluctantly followed Freeport out the door. China Moly, a state owned miner, picked up Freeport's share, and a private Chinese private equity firm took Lundin's 24%. Essentially, 80% of TF was valued at $3.8 billion. Since Kamoa-Kukula is not as valuable as a similar grade OPEN PIT, this implies IVN's 39.6% share of an underground mine of similar grade should be worth less than half of $3.8 billion, somewhat less than $1.9 billion.
To be fair Freeport is paying off substantial debt, and funds from this sale will be used to ease the burden. Freeport also announced their sale when copper was $2. By the time Lundin threw in the towel the price was back up to $2.50. Still, I can't imagine it was an easy decision to walk away from such an incredible property. The only reason I can come up with is the political risk became too great in comparison to the potential profit. Clearly RF believes he can succeed where they gave up. Instead of selling to the Chinese, he brought them in as partners.