Zambia’s Copper Renaissance

Comment By Tshepo Magagane

Zambia’s Copper Renaissance – really simple, of the 3Mtpa target, 800tkpa has to come from independent projects!

https://research.massifcap.com/p/zambia-s-copper-renaissance?utm_campaign=zambia-s-copper-renaissance&utm_medium=newsletter&utm_source=research.massifcap.com&_bhlid=293b58d214f82873ed23384bebbfce5ebf3c8427

Independent projects need to go through the following:

MRE – let us assume USD5m

PFS – USD60m

BFS – USD100m

PF – USD160m (equity)

However, as you go into production – on the downside, you will be producing USD500m on a Tier 2 project against a cost structure of USD200m…

…which means that in 24mths, you would have paid down the PF debt and recouped the equity cheques!

Now if you take a reasonable base case, you will be doing revenues of USD1bn pa against the same cost structure which means that you would have paid down the PF debt and recouped the equity cheques in 12mths into production!

Why a portfolio of these assets in a Fund/SPV is an Investment Decision that makes Iron Ore (and other bulks) pale in comparison [see the contribution to Australia at a national and entrepreneur level].