Following assumptions for base metals for FY07
$US
Zinc: 1.50/lb
Copper: 2.50/lb
Lead:90c/lb
Gold:575/ounce
Silver:10/ounce
Expecting FY07 (end dec 07) of $380 to $400m
380 000 000 / 1,700,000,000 = 22 cents a share (*NOTE = Number of shares outstanding includes the buy out of AGC for 0.65 shares for every AGC share (AGC shares outstanding is 215m)
TARGET PRICE FOR OXR AT DEC 07 = $3.24 - $3.30
From the Annual Report 2006Review of operations
Sepon Gold Production
During 2006 Oxiana’s Sepon Gold Operation in Laos, produced
173,524 ounces of gold (2005 200,370
ounces) and
203,547 ounces of silver (2005 109,460 ounces).
Sepon Copper Production
During 2006 Oxiana’s Sepon Copper Operation in Laos, produced
60,803 tonnes of copper cathode (2005
30,480 tonnes).
Golden Grove Zinc and Copper Concentrate Production
During 2006 Oxiana’s zinc and copper concentrate operation at Golden Grove in Western Australia,
produced
138,817 tonnes of zinc contained in concentrate (2005 33,290 tonnes),
10,811 tonnes of copper
contained in concentrate (2005 10,362 tonnes) and
11,633 tonnes of lead contained in concentrate (2005
nil). The Oxiana Group purchased the Golden Grove operation in July 2005.
(16 ounces make a pound)
GOLD: 173 thousand ounces
SILVER: 203 thousand ounces
COPPER: 70 thousand tonnes (2204 pounds make a tonne)
ZINC: 138 thousand tonnes
LEAD: 11 thousand tonnes
Forecast revenues in US Dollars:
$385m for copper
$456m for zinc
$22m for lead
$100m for gold
$2m for silver
TOTAL REVENUE: 965m (US) =AU$1.3billion for FY07
Expecting FY07 (end dec 07) of $380 to $400m
380 000 000 / 1,700,000,000 = 22 cents a share (*NOTE = Number of shares outstanding includes the buy out of AGC for 0.65 shares for every AGC share (AGC shares outstanding is 215m)
TARGET PRICE FOR OXR AT DEC 07 = $3.24 - $3.30*** REVISION ***
Copper price at $US3.40 a pound = $US525m in revenue
Silver revenue also revised up = $US30m in revenue
Total REVENUE: US$1,133 billion = AU$ (*1.25) = $1,416billion
Approx profit = 400,000,000 / 1,700,000,000 = 24c = $3.41 or at MINING Valuation ??
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Production Dec 2006 QTR:
Gold produced at Sepon 40,907oz
Gold produced at Golden Grove 15,549oz
Silver produced at Sepon 61,222oz
Silver produced at Golden Grove 1,031,142oz
Average received gold price US$608/oz
Copper produced at Sepon 15,862t
Copper produced at Golden Grove 1,319t
Average LME Cash Copper Price US$3.21/lb
Zinc produced at Golden Grove 46,605t
Average LME Cash Zinc Price US$1.91/lb
TOTALS
COPPER: 17,181t
SILVER: 1,092,364oz
GOLD: 56,456oz
ZINC: 46,605t
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Mineral Resource
Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase ‘reasonable prospects for economic extraction’ implies a judgement by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and technical reports.
Inferred Mineral Resource
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.
Indicated Mineral Resource
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed
Mineral Reserve
Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.
A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or
equivalent facility. The term ‘Mineral Reserve’ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.
Probable Mineral Reserve
A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Proven Mineral Reserve
A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.
Application of the Proven Mineral Reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability.
RESOURCE AND RESERVE CLASSIFICATION
Technical Reports dealing with estimates of Mineral Resources and Mineral Reserves must use only the terms and the definitions contained herein. Figure 1, displays the relationship between the Mineral Resource and Mineral Reserve categories.
