RE:RE:RE:RE:RE:TradingThis issue about acid consumption has come up a few times. To see if it has merit, can someone please help me with the basic math on acid consumption costs?
The PEA is worth reading rather than just looking at the summary information. It shows net acid consumption at 40 kg of sulfuric acid per tonne for oxide mineralization and 35 kg / t for mixed & enriched mineralization. The testing in this area appears to have been exhaustive and robust.
The PEA assumes $0.12 per kg of acid purchase costs in the first few years. That is the cost delivered to site in the first years of operation. The PEA price for acid drops significantly in the later years, I'm not sure why that would be.
38 kg multiplied by $0.12 is $4.56 per tonne of ore processed. Each tonne of ore processed appears to yield >7.2 lbs of copper including ROM processing. So wouldn't sulfuric acid costs conservatively equate to 63 cents per pound of copper processed, being $4.56 / 7.2? Regardless of errors within this calculation, acid costs and use is already baked into the PEA operating costs which were estimated at $1.22 per pound of Copper processed, like grossmkrp said.
Acid will be a cost of operation, but I wonder why this would be a deal breaker for somebody considering an investment based on what is in the PEA. If acid prices double, that would potentially add 63 cents per pound and operating costs would still be under $2 per pound using the PEA assumptions. I pulled a H2SO4 price chart and it seems to be fairly stable. Copper prices and acid prices should also be somewhat correlated.
I'm excited about the potential here but also looking to learn more and poke holes in my thesis. We all want this to be successful but criticisms are also value added. Every potential investment will have some negatives and I don't want to be blind to them. I just don't see acid as one of them here unless acid costs had the potential to rise dramatically. Good luck.