RCH richfield group limited

first phase in progress

  1. 1,057 Posts.
    Nice start, will work towards 7 this week and 20 in about 3 weeks.

    As I previous posted, I used a recent feasibility study of Moly compay Ruby Creek (Canadian) to identify all the engineering and operational costs associated with building and running a small to medium size Moly plant. This gave me the imputs for a similar size plant for RCH. I can tell you there is no harder place to build a plant than Canada so this one wouldn't be much more although just to be safe I added $200K to the capex.

    Here are the basic results.

    Capex $500M (I added $200M)
    Annual Capex Maintenance $5M.
    Mining 15,000,000 tonnes p.a.
    Mill Feed 7,200,000 tonnes p.a.
    Waste: 5,000,000 p.a.
    Grade .168%
    Dilution 1%
    Loss through Roasting 1.5%
    Marketing costs 2% revenue.
    Transport: $US150 per tonne
    Sale Price: $20lb (current spot is about $US30lb)
    Gearing: 75%
    Interest Rate: 10%
    Amortization: $50 million p.a.

    Annual Net Profit Before Tax: $265 Million.
    Annual Cash Profit: $315 Million.
    Now deduct 25% for the minority interest.

    That is for a modest size plant. If you stepped up to one the size of Moly Metals ($1 Billion) you would be doubling the annual net profit. However you wouldn't do that unless you have grown the resource above $100M tonnes where its at right now.

    Equity would need to be issued to a major, which for this project would be a sinch, so $250M would probably what the major would need to stump up. Its likely that the major which lends the money will also stump up the equity.

    I'm pretty confident on my figures, the feasibility numbers were robust.

    RCH would have the second highest grade in the world for pure Moly Metal miners

    Anyone buying at current prices will do well.
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