Hi 65, I've been giving a bit more thought to your question and done a fair bit more research: What the assay results show is that the boys have 2 totally different Cu finds about 15 kms apart (see anns: 18/4, 13/6, 18/6, 25/6, 4/7).
The first brand new discovery, called '7B' is copper, zinc, gold,silver and various VMS halo minerals associated with a VMS extrusion.
The assays tell us that we have Cu with grades over 1% over a 15-20m intersection with a strike length of at least 1.4 km and its open in all directions. The anns also tells us that the mineral is disseminated throughout the holes and the drill holes finish in minerals (i.e.haven't found the bottom).
Preliminary geo modelling has indicated the potential of 200m tons at grades of 1% Cu.
If we heavily discount this to 100 mt (to be conservative) at 1% Cu + with no credits allowed for other minerals, then 1 % of 100 mt = 1 million tons of Cu (and likely to be a lot more).
To put this in perspective, SFR has 700,000 - 800,000 tons. Moreover,this makes no allowance for the possibility of AQR finding the VMS source.
The ann on 18/4 includes a geo's drawing of the likely VMS structure.
In addition to '7B', the ann on 4/7 has assay results showing John Hill/Kiwi Carpet is a giant copper porphyry supergene blanket, currently 6.3 km long X 2 km wide and open in all directions, including at depth.
Refer to El Temiente in Chilli for a look-a-like structure.
Current projections for the amount of Cu range from 500mt to 1 billion tons at a minimum of .35 Cu.
Again, being conservative and discounting this to the bottom level, 500 mt @ .35 Cu is 1.75 million tons of contained metal (and again, likely to be a lot more).
Another way of looking at monetising this is to conservatively value the dirt at $30 per ton. At an operational cost of $10 per ton, there is a GP of about $20/ton.
Now the key to the economics of these types of very large porphyry systems is "throughput". The systems need to be large enough (& John Hill/Kiwi Carpet is easily large enough) to do about 15 million tons per year = $300m/yr GP. This equates to a payback period (on Capex) of under 2 years!
Again for reference you can look at Yellow Head Mining which has 700mt at .26% and an NPV of 15 times AQR's current market cap.
Interestingly too, Xstrata is processing .2% dirt at Mt Isa.
This is getting too long so I'll finish in pointing out that 7B and John Hill are next door to all necessary infrastructure with a port only 150km away by road. There will also be an easy start with 7B mineralisation from 6 m deep.
Hope this answers your question better?
AQR Price at posting:
20.0¢ Sentiment: None Disclosure: Held
