CUDECO TO HIT STRIDES WITH $2B REVENUE PREDICTION
4 March 2016, Written by Jenna Rathbone
CUDECO'S (ASX:CDU) Rocklands Copper project is expected to generate close to $2 billion in revenue over the next 10 years, according to a new feasibility study by Mining Associates.
The global geological, resource and mining consultancy company predicts the Rocklands project, which is nearly 90 per cent complete, will see annual net free cashflow of $631 million.
This positive news follows a tough year for the Gold Coast-based company, which has been hit by the slump in resources prices and the shock ousting of company founder Wayne McCrae.
CuDeco managing director Peter Hutchinson says the study proves that the company is set to hit its strides.
"The feasibility study provides confirmation via independent technical due diligence that our current modelling is appropriate and the project is not only viable but will generate considerable cash flow from this point forward," says Hutchinson.
"When the original decision was made to develop Rocklands it was a very different environment, so it is pleasing to see that in spite of the currently challenging commodity pricing environment, Rocklands remains a robust project."
At the end of 2015, CuDeco launched an $83 million rights issue, fully underwritten by the company's three cornerstone Chinese investors China Oceanwide International, New Apex Asia Investment and Sinosteel Equipment and Engineering.
It is estimated that an additional $64 million is required for the project to reach practical construction completion.
CuDeco's non-executive chairman Noel White says the feasibility study is an important document, in that it assesses the viability of Rocklands to a very high level of detail.
"The release of the feasibility study greatly enhances project transparency, and will ultimately underpin anticipated interest in the planned rights issue," says White.
Trial mining commenced in 2012 at Rocklands, which is about 17 kilometres northwest of Cloncurry, and at the end of June 2015 a total 13.8 million tonnes of ore and waste had been excavated, with an estimated 2.2 million tonnes of ore stockpiled and ready for processing.
Rocklands is expected to create 180 jobs in the Cloncurry region once full production is achieves and up to 400 new supporting jobs across North Queensland.
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter