*** Warning *** this post is for those who like numbers.

2013 Feasibility Study (FS) annual net cash flow (NCF):

• 657M CAD (years 1 to 7)
• 415M CAD (years 8 to 21)

Impact due to metal price variation

Copper price difference between 2013 & 2019:

• 2013: $3.25 US with an exchange rate of 0.97 = $3.35 CAD
• 2019: $3.15 US with an exchange rate of 0.77 = $4.09 CAD
• for a difference of $0.74 CAD (positive) per pound

Gold price difference between 2013 & 2019:

• 2013: $1,445 US with an exchange rate of 0.97 = $1,490 CAD
• 2019: $1,300 US with an exchange rate of 0.77 = $1,688 CAD
• for a difference of $198 CAD (positive) per ounce

Therefore, each pound of copper increases the NCF by $0.74 CAD and each ounce of gold increases the NCF by $198 CAD due to price variation.

Impact due to cost variation (2013 FS)

•          The C1 cash cost was $1.05 CAD with an exchange rate of 0.97
•          The C1 cash cost was $0.71 CAD with an exchange rate of 0.80
•          for a difference of $0.34 CAD (positive) per pound of CuEq

Therefore, each pound of CuEq also increases the NCF by $0.34 CAD due to lower operational costs.  Note: The long term consensus exchange rate of 0.77 would impact this number even more favorably.

2013 estimated production per year:

• 261Mlbs of copper and 247koz of gold (years 1 to 7) – 363Mlbs CuEq
• 204Mlbs of copper and 167koz of gold (years 8 to 21) – 273Mlbs CuEq

Calculation:

• (261Mlbs x $0.74) + (247koz x $198) + (363Mlbs x $0.34) = annual increase of NCF around 365M (years 1 to 7)
• 204Mlbs x $0.74) + (167koz x $198) + (273Mlbs x $0.34) =  annual increase of NCF around 277M (years 8 to 21)

 Adding these numbers to the baseline:

• 657M + 365M = $1,022M CAD (years 1 to 7)
• 415M + 277M = $692M  CAD (years 8 to 21)

When putting these parameters in a Net Present Value calculator, at 8%, the above numbers move the needle from approximately 500M to 2.5B.

Finally, the above estimate does not include other possible upgrades, such as:

• A higher grade starter pit
• Teck`s RACE 21 technology
• Reduction in Capex
• Optimization
• Increased in tonnage (2-3%)
• Waste converted to resources
• Inferred resources
• and only uses 50% of the resources (which is minimum)
• Etc.

Obviously, this is all IMO,

MoneyK