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UPDATE - Independent assessors give Weatherly's Tschudi project US$133mln NPV

Published: 21:24 19 May 2014 AEST

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--adds broker comment, share price--

An updated financial model has put a price tag of US$132.7mln on Weatherly International’s (LON:WTI) Tschudi copper project in Namibia.

African mining services group Minxcon raised the after-tax net present value (NPV) of the project from US$105mln in 2012 when it carried out the bankable feasibility study  for the AIM-listed miner.

At the same time, the life of mine cash costs have come down by around US$41 to US$4,226 per tonne of copper.

The breakeven price has been calculated at US$4,675 a tonne, which is also the total notional all-in cost.

Minxcon concluded that “under the CE [Consensus Economics] forecast for copper prices the project is very robust with an IRR [internal rate of return] of 89% and an NPV of US$133 million”.

At the end of April, the project was 44% complete and on schedule to deliver first copper in the second quarter of 2015.

Chief executive Rod Webster said: “It is good to see that 15 months on there has been a reduction in the project's operating costs and an increase in the project's overall value .”

Weatherly added that the measures taken at the Central Operations have boosted production in the quarter to 6,000 tonnes of contained copper, while costs are also lower as a result.

RFC Ambrian said that updated financial model confirms that the new feasibility assumptions have had a positive influence on the project economics.

So far Tschudi's development has progressed with no increases in capital or operating costs and as the production date nears, assumptions are often more certain.

The share price came off after the company’s last quarterly results, probably due to the high unit costs reported at its central operations. 

Thus, it is a positive signal to send to the market that productivity rates have increased to within 1,000tpa of its annual 7,000tpa of copper production and that costs have decreased below the last reported quarter (US$3.34/lb). 

Shares rose 8% to 2.57p.

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