RE:Faraday has Better gradesNot so fast Pat.......Not to take anything away from Faraday, but that deposit isn't even in the same league at Santo Tomas.
The resource is about 1/4 the size of ST, most of it is underground and with the cut-off grade they use, 0.31%, representing breakeven grade, and an average grade of just over 0.50%, margins would be less than 40%. Santo Tomas'' cut-off vs average grade would suggest margins of 65%. Faraday therefore would generate about half the profit on a quarter the resource. 1/8 of the profit, and most of that from a block caving operation......not a technical simple type of mining and one with few proficient operators and a bad habit of cost overruns..
Faraday talk of 50k tonnes of copper production per year, hardly a dial mover for any major. ST's historical pfs had 125k tonnes of copper production per year amd it looks like the resource can support even higher levels....we'll see soon enough in the pea.
Why did Faraday use a 7% discount rate when industry standard is 8%? I suspect at 8% the numbers fall off significantly. If the IRR is 16% at a 7% discount rate, already pretty thin for a small project where high a IRR should be the case, at 8% I suspect it's in the low teens, and a non-starter.
Copper projects big enough to get a buyer's attention look a lot more like ST than Faraday, and aren't technically challanging, like a block cave operation.
With its higher margins, simple processing, and size, ST can be expected to generate an NPV that's multiples of Faraday's, AND be big enough to be an asset somebody will want.
Even that recent high grade intercept FDY recently reported......deep, and wouldn't generate margins any greater than ST's average grade.
My 2 cents is that ST is among the big boys, top tier stuff, and Faraday isn't close...an okay project, but not one to pick over ST. At the current comparative market caps, Oroco is the far better option.