IKN

Win us with honest trifles

World Copper (WCU.v): Believe this…

…and you’ll believe anything. For more information, look at the input prices that serious teams use for oxide operations in Chile. Start with Marimaca (MARI.to), who assume $3.19/tonne for mining and $4.95/tonne for processing in an easier and more accessible deposit with water. This PEA from WCU is a joke, Henk van Alphen is laughing at you and for more information please see “The Real Meaning of PEA“.

UPDATE: It turns out that even while writing this brief post just before the open, the first mail arrived on the subject of WCU and its PEA release today. Therefore and to keep mailbag to a minimum, be aware that a junior can reverse-engineer any old headline number it wants from a PEA. What the discerning reader needs to look at are its input assumptions, not the resulting bold-type parts at the top of any rose-tinted NR. So, when it only takes a minute or so to see “highly optimized” cost parameters and then about two or three more to spot other glaring examples of “PEA Perfection”, there’s really no point in studying the project any further and the fact that the person behind this bad joke designed to con greenhorns happens to be Henk van Alphen only goes to confirm its junk status. The end.

22 Comments

    Agreed, too good to be true. $7,756/ton initial capex intensity in this environment for a high altitude project? Mining costs per ton significantly lower than marimica’s estimate from 2 years ago, even with a resource grade cutoff less than half? Market reaction seems to indicate there are still some skeptical people out there

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    Speaking of bad NRs – QCCU posted quite a sketchy one today.

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      The presentation and explanation may have sucked, but nothing wrong with the data.

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        I’m put off by the additional metal goosing up poor numbers and because the +0.5% Cu zone is deep. It is FAR from a deal-breaker, though. If we see trend towards 20c again, I’m surely buying again – the deposit has gone nowhere.

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          In other words, you don’t know what you’re looking at. Okay.

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            Fair.

            Would love to hear what you have to say in that case

            This…

            “…re-interpreted from a vein and halo categorization to the domaining of global mineralized envelopes above a nominal cut-off grade of 0.2% Cu-eq using all historical and current drilling results”

            …is the most significant information. The overall avg grade will drop going forward, but as the MRE had a near 4x leeway to CuEq there’s plenty of room. The implication of the above is tonnage grows and eventual project economics are robust. QCCU has always pitched the concept of “another Malartic” and today’s NR is the first time it shows.

    WCUFF has been on my radar since you started posting about it. Seems like you have an axe to grind with these guys.

    I love Maria too, mining costs in their PEA are $3.19 per tonne PROCESSED and $1.74 per tonne MINED (see their PEA) . The WCUFF number is $1.87 per tonne MINED and (doing some math) $1,445.7 / 365.8 Mt – 3.95 per TONNE processed. Even with economies of scale Escalones numbers are worse, so what’s the problem?

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    Anon – Escalones as presented by WCUFF is twice the size of Maria, there’s economies of scale and high altitude mining doesn’t even start until 4,000m. The processing for Escalones is done at valley level from what I’ve heard since tracking this project. Mining costs are well in line, Otto’s not comparing the right numbers.

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      Amateur hour has arrived.

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        Aren’t you a former(current) analyst, that’s what I heard? Comparing costs per tonne processed to costs per tonne mined? Then when doing the compproperly it confirms that the costs fore Escal are higher (as you said it should be)? I read your blog for the well reasoned snark but this is just basic maths errors.

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          You’re welcome to disagree, what’s more you don’t need to take stupid me and my shaky math skills at face value. So rather than hear it from snarky old IKN, go to Chile. Then find any mining engineer with a reasonable CV. Then tell them they can mine and process oxide material for the cost WCU claim. Anywhere, any size, any met and at any altitude, with or without easy water supply at hand. Then start insisting the way you’re trying to do here. The laughter will begin and the longer you go on, the louder it will get. It will ring in your ears for weeks. So get off that high horse and learn the easy way or be stubborn and learn the hard way but either way, the lesson is yours to learn. And I promise you, hand on heart, that I don’t even care if you remain ignorant. It’s your problem, not mine.

          I read IKN for entertainment, so stop talking about one of my stocks.” To quote Bill Hicks, it’s always funny until someone gets hurt. Then it’s just hilarious.

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    Maybe I am a bit a naive, but shouldn’t the numbers in the left and right columns of the cost summary add up to the numbers at the bottom?

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    Huh? Marimaca is mining and processing for less cost, despite being 1/2 the size. But WCUFF can’t, are you concerned with Marimaca’s costs too? Oxides are near surface by definition. Escals are on top of a weathered ridge, gravity is on their side, and yes they still cost more than Mari. Despite economies of scale.

    I’ve got no skin in this game, but this just seems like blind anger toward these guys.

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    Maybe I am a bit a naive, but shouldn’t the numbers in the left and right columns of the cost summary add up to the numbers at the bottom?

    One red flag too much. I sold.

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      Common for mining costs to be reported as $/t mined because that’s more important than $/t processed. If you have a high/low grade, or high/low strip ratio it can distort $/t processed numbers. Analysts like to see $/t mined. I verifed the numbers as well, $3.95/t processed (Mining) + $4.13 (Processing,G&A,Closure) = $8.08. Checked when IKN said they muffed up.

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      They do if you convert all items to $/tonne processed

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      They do if you convert all items to $/tonne processed

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    Filo del Sol PFS has them mining 624 million tonnes for $999M LOM – $1.60/t mined. They are a Gold Copper Oxide (near surface) in Chile.

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    Mining Stock Daily covered this and it covers the beefy parts. they are pretty knowledgeable and generally don’t bring scammy companys onto their episodes-
    https://www.miningstockdaily.com/

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      Seriously, what part of “sponsored coverage” do you not understand? These companies pay hard cash to get on these programs and people like Trevor Hall are as complicit as the rest. But don’t worry, I have no intention of trying to convince anybody who has already made up their mind. When you’ve been doing this as long as I have, you know retail investor belief systems are way stronger than facts, history, previous results or any type of DD that might dare to suggest they are perhaps incorrect in any manner of previously formed decision, despite the fact that 95% of junior explorecos fail and spotting patterns is easy. It’s your money, spend it however you want. To Da Moon.

      http://listserv.linguistlist.org/pipermail/ads-l/2011-December/114879.html

      Reply

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