I imagine Exco's options & offers are vast right now.I guess Sin...

I imagine Exco's options & offers are vast right now.

I guess Sin Tang are in there with some sort of offer.

I reckon SOL would want to be involved either as a JV partner or future takeoff partner in some other tennements (with their 53% ownership of CopperChem & having worked together already), when the Great Australia mine's life is over, or both.

Not really sure about where exactly IVA fit in, but with the size of their holding, nothing can be ruled out with them.

We have discussed most of these options before, I know, but I have not seen the pro's & cons of an asset sale of E1 discussed on here before.

anyway.....so I'll start.

It would seem to me that the best place for E1's ore is through the plant at the Ernest Henry Mine, one way or another, any way you cut it, Ecomomically, Time Frame, Cost, it makes the most sense.

I think Exco would like a toll treatment/ore takeoff deal with Xstrata, but I dont think Xstrata are playing that game.

My thoughts are that Xstrata are offering only a lowball deal for a toll treatment/takeoff, and are perhaps offering a better deal for an asset sale, forcing Exco into a bit of a corner.

Exco have spent a massive amount of time and money to get E1 ready for mining, and would be a little disheartened to lose it, to an asset sale.

They would also know there is inherent risk in mining, $AU price, Cyclical Commodity Prices, Sovereign Risk (with this heavy taxing goverment), not to mention building a plant, de bugging it & getting it to perform at the specified level etc.

To me E1 is best suited with Xstrata, although I didnt think I would say an asset sale would be a good thing six months ago, I am not so sure now.

Remember E1 is not really a tier 1 asset (30-40yr + expandable mine life), dont get me wrong, it's a nice bankable asset, but only around a 10-12 yr mine life limits it.

I can see many benefits in an asset sale, which would set Exco up for years to come.

If Exco could get a deal for an asset sale of E1 of around 7-10% of the total value of the minerals at E1 plus a reinbursment of the costs of the mining lease application, I can see that being a nice deal.

Exco would have the money for a new plant(maybe at Hazel Creek) in the bank, may also be able to afford a Capital return to shareholders ( to reward them for their loyalty) & with White Dam & Great Australia also bringing in even more cash over the next few years, the shareprice of Exco would be totally derisked, at a very nice level, for number of years (with the cash to Explore & the cash for a new plant in the bank), while they prove up the other tennements etc.

There would still be further Up side in Exco's shareprice, as they prove up other assets or extend White Dams minelife Etc, but with a large amount of cash in the bank, that would limit the downside of the SP in the Short/Medium term.

I know this wont sit well with some of you guys, but it is worth discussion, we havnt discussed this option before, shoot me down if you want, but I've been thinking about this for a while now, so it sits OK with me.

I know it's not "sexy" to just be an explorer, rather than a miner/producer of copper, but remember there are also some risks involved in producing.

wadda ya think ???

cheers