Xanadu Mines: A copper/gold PFS with biblical scale numbers!
Xanadu Mines Executive Chairman Colin Moorhead on 3AW, 2GB, 4BC & 6PR Bulls N' Bears Report
Listen to ASX-listed Xanadu Mines Executive Chairman Colin Moorhead talk to Matt Birney on the Bulls N’ Bears Report about Xanadu’s crazy big pre-feasibility study numbers on its massive copper-gold play that has enough mineralisation to be mined for three decades.
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Xanadu Mines is looking to build a massive copper/gold mine in the mineral rich jurisdiction of Mongolia. It has just tabled a pre-feasibility study for its flagship Kharmagtai copper-gold project in that country that features some eye-watering figures and a massive scale with enough mineralisation to underpin almost 3 decades of mining. The project will be operated alongside Xanadu’s joint venture partner and long-time backer, Chinese mega-miner Zijin Mining.
RADIO INTERVIEW - TRANSCRIPT
Matt Birney - Welcome to Bulls N' Bears brought to you today by copper-gold developer Xanadu Mines.
Matt Birney - ASX code: XAM
Matt Birney - I'm Matt Birney and I'm joined now by the Executive Chairman of Xanadu Mines Colin Moorhead.
Matt Birney - Hi Col.
Colin Moorhead - G'day Matt, thanks for having me today.
Matt Birney - Okay so Xanadu Mines is looking to build a massive copper-gold mine in the mineral rich jurisdiction of Mongolia. The company has just tabled a pre-feasibility study for its flagship Kharmagtai copper-gold project in that country that features some eye-watering figures and a massive scale with enough mineralisation to underpin almost 3 decades of mining. The project will be operated alongside Xanadu’s joint venture partner and long-time backer, Chinese mega-miner Zijin Mining.
Matt Birney - Okay Col we'll get into the details of that PFS shortly but firstly, just how big is your JV partner on this project, Zijin Mining? How much of it do they own and how much does Xanadu own?
Colin Moorhead - Well Matt, Zijin is a publicly listed company in Shanghai and Hong Kong with a market cap in excess of $60 billion US dollars.
Colin Moorhead - They're in 18 countries and produce over million tons of copper and 2 million ounces of gold per annum at the moment and growing.
Colin Moorhead - They own 38.25 per cent of the projects same as us and they own 19 per cent of Xanadu.
Matt Birney - What's the resource at Kharmagtai now and how much contained copper and gold does it have?
Colin Moorhead - Currently got 22.2 billion tonnes containing 4.7 million tonnes of copper and 11 million ounces of gold.
Matt Birney - Okay so you've just released a pre-feasibility study on Kharmagtai, let's get into the numbers with some rapid fire questions and answers.
Matt Birney - Firstly what copper and gold prices did you use in the study and how do they compare to the current spot prices?
We use GOS 2100 for gold which is versus 26 odd 100 for gold at the moment spot and we used a copper price of 410 versus a spot of 452 I think today.
Matt Birney - Okay what will it cost to get this project into production in US dollars?
Colin Moorhead - US dollars we're estimating to be $890 million I'm sure Zijin will be able to do it cheaper than that and that returns an NPV of around $930 million using the prices we've assumed.
Matt Birney - What's the post tax internal rate of return at the prices used in the study and also today's spot prices?
Colin Moorhead - The IRR is estimated to be 21 per cent at study prices and 31 per cent at spot.
Matt Birney - And what's the expected mine life?
Colin Moorhead - 29 years and yeah growing of course.
Matt Birney - Alright the big question, how much money will this thing make a year on average across those 29 years? Let's go with EBITDA and US dollars on average.
Colin Moorhead - EBITDA per annum in excess of $290 million US which is north of $400 million Aussie dollars per annum yeah.
Matt Birney - And how much copper and gold will be produced each year on average?
Colin Moorhead - On average 75,000 tonnes of copper and 165,000 ounces of gold so it's a it's a big metal producer.
Matt Birney - And very quickly what will it cost you to produce a pound of copper after accounting for the gold credits at this project?
Colin Moorhead - So we have C1 cash cost net of gold credits is 70 cents which compares with the current selling price of $4.50.
Matt Birney - Colin Moorhead from Xanadu Mines.
Matt Birney - Thanks for joining me on Bulls N' Bears and remember we're only here to give you information, not advice, which you should of course seek independently.
Matt Birney - I'm Matt Birney and this is Bulls N' Bears.
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