Commodity Price forecasts – latest consensus numbers!

Analysed By Tshepo Magagane

As much as they are a fool’s errand, you must pay attention to them for debt and equity models.

I am going through the Barrick – Lumwana/Reko Technical reports. They are using this LT price as a scenario, but both projects would generate an IRR at USD3/lb (and interestingly, for Gold at Reko, they use USD1,300/oz – resulting in COGS of USD1.24/lb – I still maintain gold positioning should be in the juniors whereby the “best of class seniors” give you a floor at their AISCC of USD1,500/oz – a free option with the rest of seniors at cUSD2000/oz and anything above that just printing money).

PS: SP Angel Africa site visits – you just can’t afford as a capital allocator to not have exposure to this Transition Story (I agree with them even just on logistics, so many flights – fully booked flights):

• Moxico: We were very pleased to see so much progress at Moxico’s Mumbula copper mine with significant expansion underway.
• The rate and progress at Mimbula is extraordinary with >$1bn of contained copper is already sitting in stockpiles awaiting processing.
• Mimbula has a resource of 76.4mt grading 1.19% cu with target copper production of 56,000tpa in Phase 1 of the development with 46.000tpa of LME-grade copper cathode.
• Moxico is a private company with the stock trading in the grey market with the assistance of Moxico management.
• Kavango are awaiting on drill assays before deciding how to expand their mines and prospects at the Hillside Gold project near Bulawayo in Zimbabwe.
• The team currently support a number of local small-scale miners through the use of local crushing and simple processing facilities, with the locals taking the free (visible) gold and Kavango recovering everything the locals are not able to recover.
• The sheer number of parallel veins being mined, along with a new understanding of the mineralisation of the host rock, suggests the prospects offer good potential to expand into much larger gold mines.
• Prospect Resources’ Mumbezhi copper project lies surprisingly close to the old Equinox Lumwana copper mine, now owned by Barrick Gold but the mineralised cores are very different.
• A new theory suggests the resources at Mumbezhi represent the host rock that fed into Lumwana, suggesting a very substantial resource may be developed at the Mumbezhi prospects.
• Midnight Sun’s Kazhiba is easy to reach off the road to FQM’s Kanshanshi mine. A further 13 drill holes are planned at Kazhiba in the new field season to follow up on the 54 RC holes (2,005m) already drilled into the Kazhiba oxide copper target. 2024 drill highlights include: 10.69% cu over 21m, 5.60% cu over 26m, and 3.01% cu over 15m, and 4.66% cu over 7m.

Conclusion:  There is so much exploration and mining activity west of Solweizi in Zambia.

What was once a difficult and remote area is now teeming with geologists and mining services making access and geological investigation very much easier.

There are regular flights into the major mining centres of Ndola, Chingola and Solwezi and Starlink gives teams access to high-speed internet.