Let's do the figures on 65% of the TMR price of $54, which for the sake of the dicussion I will accept as being correct.
Let's do the figures again, noting that these calculations are VERY rough estimates as grades produced in the wet processing will have a direct effect on the amount of material that will need to be processed in the dry processing. Thererfore, are probably an over estimate.
Take for example NTU's grade of 0.73% compared with a resultant wet processed grade of 12% possible with the alluvium of Charlie Creek. This will mean that NTU will need to dry process 41 tonnes to get a grade of 30% TREO. On the other hand CUX will only need to dry process 3.34 tonnes to produce a grade of 40%.
Therefore, logically the CUX dry processinbg plant will need to be over 10x less in size for a greater grade and volume of concentrate than NTU. This would surely dramatically impact on the CAPEX price for the dry processing plant for CUX in comparison with NTU.
And these greater grades of concentrate will also impact on the cost of processing the concentrate down the line.
Therefore though I have used the 65% figure you have suggested, the 40% concentrate will lower final processing cost and therefore logically demand higher prices and as such I believe the figure is conservative, which doesn't hurt but should be recognised.
Cost of wet and dry processing for:
18MTPA = 18,000,000 x ($3.35 + $0.45) 18MTPA = 18,000,000 x $3.80 18MTPA = $68,400,000
Tonnes of TREO produced:
= Minned Alluvium x Grade of Alluvium x Recovery Rate = 18,000,000Tonnes x (0.03/100) x (70/100) =3,780 Tonnes TREO
Value of TREO produced:
=Tonnes Produced x Value =3,780Tonnes x $54,000 x 0.65 =$132,678,000
The difference between value of contained TREO and cost:
=$132,678,000 - $68,400,000 =The difference between value of contained TREO and cost of ~$64,250,000
Lets do the same figures on some more optimistic figures.
I think Out Cold makes a good point and that with average grade of 0.03 by diffinition half of the alluvium will be below 0.03% grade and half will be above.
With the size of the CUX resource the oportunity of cherry picking large amounts of alluvium with a grade of 0.05% would not seem to be unrealistic.
Tonnes of TREO produced:
= Minned Alluvium x Grade of Alluvium x Recovery Rate = 18,000,000Tonnes x (0.05/100) x (70/100) = 6,300 Tonnes TREO
Value of TREO produced:
=Tonnes Produced x Value = 6,300 Tonnes x x $54,000 x 0.65 =$221,130,000
The difference between value of contained TREO and cost:
=$221,130,000 - $68,400,000 =The difference between value of contained TREO and cost of ~$153,000,000
Of course I haven't taken into account the value of the zircon.
As a square mile will occupy the mining operation for a number of years the mining operations can be easily scaled up. For a twenty year resource life that could mean an 5 fold increase assuming 100 year life currently.
I notice your comment '"IF" the basic benefication numbers add up ...'
Do you need a BFS to say the numbers add up? I think the above shows the basic benefication numbers do add up. Come on Ausheds, admit it, the basic benefication numbers do add up. Don't be coy and admit that's why your sentiment is a BUY. LOL.
Of course they are only basic figures at the moment and I look forward to the more comprehensive figures to be announced in the near future.
Thus, DO YOUR OWN RESEARCH!
Cheers
Stoops
CUX Price at posting:
3.5¢ Sentiment: Buy Disclosure: Held
