HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: The Xstrata Riddle

If I read your post correctly, you are saying a gross revenue value of refined nickel in excess of $5 billion per year for 20 years (in today price levels) would be realistic for a greenfields development. That seems like a reasonable target given the massive front end investment, albeit that can be minimized with an optimum mine development plan. Not all of that resource needs to be in hand for a major in a highly prospective area. What we should realize is that larger development and longer time is the most likely progression for a promising but expensive new area. The majors might get motivated once the potential for a large scale multi-mineral development combines with some greater certainty in economic conditions and a determination these assets can be in the lower quartiles for all-in industry production costs. Regardless, the CLF/FWR deal tells me that there is a 90% probability that a much larger development will materialize, but further down the road than most have expected. Successful drilling is the one factor that can shorten the timeframe directly .

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