Gself, I have been following this one with interest. The CSE deposit is about 157kt of Cu. HGO are spending $130m to bring Kanmantoo back to production at 21ktpa of Copper for 10 years. The HGO resource is near all infrastructure and shipping. HGO also bought a 2nd hand copper milling facility.
If CSE think they can do it for the same price as HGO, they need to be quoted "tell them there dreamin".
I noticed that the target's stmt talked of cash flow and not net present value. Why? Because I would suspect that it is NPV negative!!!
Also, they mentioned nothing about a C1 cash cost for CSE, which I suspect could be close to $2 (HGO has one for K at $1.60) So any movement in the copper price (and we know how that can move very quickly up and down) down could make them broke very quickly.
I think KZL are doing CSE a favour in wanting to purchase them.
HT1
p.s. CSE will find it very very very hard to get funding. HGO had to do a huge capital raising and the debt facility put hem over a barrel. (Read the HGo thread and see the anger there!!!)
KZL Price at posting:
85.0¢ Sentiment: None Disclosure: Not Held
