Tier 1 or Tier 2
Posted: Mon Aug 08, 2022 4:58 pm
What Is Havieron at the moment?
“Tier 1 deposits are “Company making” mines. They are large, long life and low cost.
Using long run commodity prices it generates >$300-600m pa of revenue (i.e. >200 kt pa Cu or >800 kt pa Zn+Pb or >5kt pa of U3O8 or >250 koz pa Au) for >20 years and is in the bottom quartile of the cost curve. It has very robust economics and will be developed irrespective of where we currently are in the business cycle and whether the deposit has been fully drilled out. The resource is of a size/quality that it creates multiple opportunities for expansion.
It is expected that project’s economics will easily exceed the Company’s Cost of Capital + Country Risk Premium by at least 5 percentage-points … i.e. achieve a >12% IRR after-tax in low-risk jurisdiction such as Australia or Canada. This will impact on capital-intensity of the project.
Olympic Dam, Broken Hill and Cadia East are examples of a Tier-1 deposit.
As at Jan 2013, Tier 1 deposits have a risk-adjusted NPV at the Decision-to-Build Stage of >US$1000m. As a first-pass guess, for modelling purposes, the weighted average value of a Tier 1 deposit is notionally set at ~$2000m.”
https://minexconsulting.com/definitions/tiers/
I think you can see from that Havieron and Telfer together do not come into that category.
What will happen next week with a new MRE?
Well a resource over 6.5m oz gold + copper will propel us into a Tier 1 if the NPV is greater than $250 and the life of the mine increases to 20 years.
Personally I can’t see this happening although Newcrest need it as much as we need do.
I think these objectives will be hit by next Februarys MRE update and with a Decision to Mine, when a larger mining plan should be announced.
Havieron will be a case of a mine continually growing for many years to come and becoming what Shaun keeps saying a World Class asset.
What is a World Class asset? Well there’s not many of these about no real defined limitations but look at this old presentation from BHP.
Scroll down and find the graph where it’s suggesting a bigger footprint size is better . That’s not what Havieron is about 0.2 square kilometres it means it’s going to be cheap to get out
https://www.bhp.com/-/media/bhp/documen ... erence.pdf
“Tier 1 deposits are “Company making” mines. They are large, long life and low cost.
Using long run commodity prices it generates >$300-600m pa of revenue (i.e. >200 kt pa Cu or >800 kt pa Zn+Pb or >5kt pa of U3O8 or >250 koz pa Au) for >20 years and is in the bottom quartile of the cost curve. It has very robust economics and will be developed irrespective of where we currently are in the business cycle and whether the deposit has been fully drilled out. The resource is of a size/quality that it creates multiple opportunities for expansion.
It is expected that project’s economics will easily exceed the Company’s Cost of Capital + Country Risk Premium by at least 5 percentage-points … i.e. achieve a >12% IRR after-tax in low-risk jurisdiction such as Australia or Canada. This will impact on capital-intensity of the project.
Olympic Dam, Broken Hill and Cadia East are examples of a Tier-1 deposit.
As at Jan 2013, Tier 1 deposits have a risk-adjusted NPV at the Decision-to-Build Stage of >US$1000m. As a first-pass guess, for modelling purposes, the weighted average value of a Tier 1 deposit is notionally set at ~$2000m.”
https://minexconsulting.com/definitions/tiers/
I think you can see from that Havieron and Telfer together do not come into that category.
What will happen next week with a new MRE?
Well a resource over 6.5m oz gold + copper will propel us into a Tier 1 if the NPV is greater than $250 and the life of the mine increases to 20 years.
Personally I can’t see this happening although Newcrest need it as much as we need do.
I think these objectives will be hit by next Februarys MRE update and with a Decision to Mine, when a larger mining plan should be announced.
Havieron will be a case of a mine continually growing for many years to come and becoming what Shaun keeps saying a World Class asset.
What is a World Class asset? Well there’s not many of these about no real defined limitations but look at this old presentation from BHP.
Scroll down and find the graph where it’s suggesting a bigger footprint size is better . That’s not what Havieron is about 0.2 square kilometres it means it’s going to be cheap to get out
https://www.bhp.com/-/media/bhp/documen ... erence.pdf