Someone correct me if I'm wrong but after reading these excerpts below from the release, it seems to me that CSE will never get funding. in the words of RSM Bird Cameron KZL stand to make $95.9m from mining the three deposits and stand to walk away with $50m after trucking costs of $40m.
And they say that it will cost CSE $130m in development costs to mine the deposit. Seems to me CSE will make approx $30m loss if they go ahead, why would you borrow $130 to make $95m and in turn lose $30m. These figure are from Copper Strikes own targets statement, some of which i have pasted below.
As part of the RSM Bird Cameron Corporate Pty Ltd independent assessment, independent engineers Mining One carried out a detailed evaluation of the entire Einasleigh Project. They estimated that the cash profit from mining the three high grade deposits in the Project would be $95.9 million at a copper price of US$3.30/lb, an A$ exchange rate of US$0.90, and a range of other assumptions. Using their estimated trucking costs for this region, Kagara would incur an estimated trucking cost of approximately $40 million (for 1.7 million tonnes of ore) for transporting the ore to their Mt Garnet processing plant. As a result Kagara would realise a net cash profit over the three year mine life of $56 million. This figure alone is almost FOUR times their current Offer.
As at 30 September 2010, Copper Strike had $1.85 million in cash. The Mining One Pty Ltd Report which forms part of the Independent Expert Report contemplates a $130 million capital cost. The ability of Copper Strike to continue operations and finance development of the Einasleigh Project is dependent upon sufficient financing becoming available from debt, equity or finance markets in a timely and cost effective manner and at an appropriate price. Inability to finance in full or part a project or projects could result in reduced or no returns to shareholders. The ability to finance Copper Strike and/or specific projects can be impacted by events beyond the control of Copper Strike.
KZL Price at posting:
85.0¢ Sentiment: Buy Disclosure: Held
