RE:RE:Breakeven price of copper = $3.59Cognition777 wrote: AlfTanner wrote: I was disappointed by the earnings. It looks like they earned US$21.8M on sales of 34.4M pounds of coper. That is a profit of US$.67 per pound. With the average price of copper at $4.26, that means the breakeven price of copper for Q3 was $4.26 - $.67 = $3.59
Even with a good quarter, the company needs $3.59 copper just to break even. That seems pretty high.
Lotsa variables in there, Alf, that others have mentioned.
- sold 2M lbs less copper than they produced = +$8.5M (they didn't sell 34M as you stated)
- sold 50k lbs less moly than they produced - +$1M
- bond interest is semi-annual, so half of this quarter's payment was accrued last quarter = +$9M
- net "unrealized" loss on foreign exchange = +$2.7M
those adjustments would have basically doubled their earnings, and break even would have been (using your method) $43M/32.4 = $1.33 profit per pound... $4.26 - $1.33 = $2.93.
and besides, with the puts they hold, their minimum sale price for Q4 is $3.74 (I think) and $4.00 for the first half of 2022...
wait... what am I thinking... 32.4M lbs was on 100% basis... Taseko sales 23.4M lbs...
DOH!
that would calculate $43M profit / 23.4M lbs sold = $1.84 profit per pound. Break even by your method would be $4.26 - $1.84 =
$2.42