Elmer has said that he has targed a 3 year Capex payback on a producing mine. I am hoping that Capex will come in at around $3.8B or less for previously stated reasons.

So a starter pit needs to pay back something in the order of $3.8B (plus financing costs) in three years. A 3 year pit at 120 ktpd production will require about 130 M tonnes of ore.

Does anyone have any ideas about the grade of a potential starter pit?

Looking at the 2008 PFS they have starter pit info in table 25.6....

PFS 2008 Starter Pit info: From the 2008 PFS, pg 246:http://www.copperfoxmetals.com/i/pdf/Updated_Amended_Technical_Report_5.20.10.pdf

Table 25.6 Summarized Measured, Ind Reserves for SC

my calculations...(may be very wrong...)

First scenario: If I adjust these 2008 starter pit grades a bit (upward) for a 130Mt pit mined over 3 years, $3.0 B can be paid off handily (over $300M in the black) in 4 yrs. --- using: 8% discount, 2011 RE metal prices and recoveries, metal selling costs, and these pumped up grades: Cu 0.40%, 0.02% Mo, 0.26 gpt Au, 1.80 gpt Ag.

My pumped up grades are not a huge stretch given our recent drill results and compared to the starter grades in the table above. I kept Moly grade down as its grade doesn't fluctuate much in the table and also our RE grade for Moly. Silver is a wild card given the legacy issues and the increases in the silver grades of recent cores.

Second Scenario: Increasing Capex to $3.8B makes a disproportionate effect on the payback. D@mn discounting! Same pit and numbers, takes us to a payback early in year 5. We will need a bigger pit with these same grades (about 170Mt) to make the same rate of daily production in the first scenario.

Keeping to the 3 yr target for payback... i adjusted grades a bit more upwards to see where the 4th yr drops away..

Third Scenaro: slip Capex down to $3.665 B, increase production to 150 ktpd (decreasing Capex, increasing production) and boost the grades again to the highest (??) ranges: Cu 0.43%, Mo 0.024$, Au 0.30 gpt (that's pretty high for SC!!), Ag 1.95 gpt. I get a mine payback in January/Feb of year 4 (who is counting months!). 165 Mt starter pit with these average grades would be required to meet this production.

These are just straw dog numbers to see how a starter pit needs to look. I think Elmer has a pretty good chance of getting to 3 or 4 years. 3 years is significantly harder to get to than 4 years.

Perhaps delaying some of the larger Capex items to a year or two into the start of production might be a strategy. I 'paid' all of the Capex in the 4 yrs leading to the mine startup with most of the spending weighted to the last 1 and 2 years before production.

Thoughts?