Here's a quick comparaison between both projects with some observations. Let me know if you see anything that should be changed.
| |
|
Schaft Creek |
QB2 |
| Capex |
$US/B |
2.65 |
4.71 |
| Mine Life |
years |
21 |
28 |
| Throughput |
ktpd |
133 @ 92% |
143 @ 95% |
| LOM Mill Feed |
Mt |
1030.2 |
1400 |
| Copper Equivalent Production |
|
|
|
| First 5 full years |
ktpa |
181 |
313 |
| LOM |
ktpa |
162 |
256 |
| C1 Cash Cost |
|
|
|
| First 5 full years |
US$/lb |
$0.46 |
$1.29 |
| LOM |
US$/lb |
$1.00 |
$1.47 |
| AISC |
|
|
|
| First 5 full years |
US$/lb |
$0.72 |
$1.40 |
| LOM |
US$/lb |
$1.18 |
$1.53 |
| EBITDA |
|
|
|
| First 5 full years |
US$/B |
$0.7 |
$1.2 |
| First 10 full years |
US$/B |
$0.6 |
$1.1 |
| NPV (8%) |
US$/B |
0.8 |
2.9 |
| IRR |
% |
13% |
16% |
| Payback Period |
years |
4.8 |
5 |
| Mine Life / Payback |
|
4.4 |
5.6 |
1) SC capex is 43.7% lower than QB2. When compared to thoughput, SC can be built for US$20K/t vs. US$33K/t for QB2. Lower capex intensity = less risk.
2) Mine life is 25% less for SC, but it's also moving 26.4% less material. Since SC is only using 60% of the available resource. 28 years could also be achievable. QB2 has more proven resources, but SC has significant potential to host additional porphyry style copper mineralization.
3) Assuming mine life could be increased to 28 years, SC could produce 63.3% of the QB2 production for 43.7% less capex. That's less investment per pound of copper produced for SC.
4) SC has an AISC (LOM) 22.9% lower than QB2. That's less exposure when in a low price environment.
5) From an EBITDA perspective, SC & QB2 are equivalent when doing a EBITDA/capex ratio.
6) Payback period is similar
7) QB2 is in Chile. SC is in Canada.
8) SC has more gold, which is good downside protection.
9) QB2 has a profitability index after-tax NPV (8%)/capex) of 0.62 vs. 0.32 for SC.
10) QB2 has a 16% after-tax IRR vs. 13% for SC. Let's no forget that Teck has a massive tax credit that could bump that IRR instantly.
Conclusion: Let's see if the 2021 Program can improve items 9 & 10, which would make of SC, all proportions equal, a project very comparable to QB2 if not superior in many points. It's important to note all the above numbers are for 100% of the projects, but in reality, Teck only holds 60% of QB2 vs. 75% of SC with the potential to acquire 100%.
IMO.
MoneyK
Sources:
