KOZAA Report

KOZAA (NR) => Konakli Copper Mining project, according to company’s prelim environmental impact assessment report submitted to the Ministry of Environment, will have => Stripping ratio of 2.3:1 (waste/ore), Initial size of copper-gold ore: 1m tons with a mine-life of 27 months. Assuming 1.2% grade and 90% recovery rate => Will extract $92.8m worth of copper and $15m of gold from the mine. Given 60% EBITDA mrgn => translates to $65m EBITDA over 27 months. Given investment costs roughly @ $100m  => Size of ore deposits need to be 3-4 times higher to make the project feasible, while a ballpark est indicates the market is pricing in 7-8 times higher reserves. However, according to mgmt, these numbers are not indicative of actual mine size, as numbers are old and heavy drilling is still underway. We estimate annual processing capacity of the new mine to be at least 1m tons => suggests at least 12k annual copper production, $90m revenue.