how robust is mds?, page-33

thanks ASK; great research

potentially a very high capex project. i did not realise capex could be so high. this gives the stock less value. i reckon EOC would be lucky to get $150m for a 100mt mineable reserve at Rockwood


"EOC have yet to release full information on the drilling including what proportion of coal that may be accessible to
potential open pit mining. So we regard the following valuation as an interim scoping valuation which assumes
possible open pit resources at ~30% of total resources. We await EOC’s confirmation of firmer parameters."

"There is likelihood that there will be multiple coal seams at the crest of the interpreted anticline(s) are shallow enough to be accessed by an open pit. We have assumed 30% (94mt ROM, 64mt product) is able to be accessed
by an 18 year open-pit mine and conducted an NPV to obtain a ballpark estimate for a green-field coal development at Rockwood."

"Other key assumptions we use include 5mtpa ROM operation, 68% wash recovery and 70% PCI/30% high energy thermal coals products. Capital cost we use $671m to first production and $85/t operating cost, which is 2/3rds and
80% respectively of Carabella Coal’s recent capex and operating cost scoping study for Grosvenor West project."