News

October 14, 2008

Equinox Minerals Now On Verge Of Copper Production

By Our Man In Oz

Putting prices into perspective is not easy in a panicked market. That’s why it is sometimes worth taking a brief trip back in time to get a clearer view of the opportunities which lie ahead. Equinox Minerals is a useful starting point for a journey “back to the future”, and it starts with a double-digit number, 63. In 1999, when Equinox completed the studies which led to a decision to mine the Lumwana copper deposit in Zambia, US63 cents per pound was the price of copper. Today, in a horribly depressed market, copper is selling for around US$2.48/lb, close to half what is was at the peak of the boom, but still 3.9 times more than when the decision to proceed with the mine was made. Time and rising costs have pushed the numbers around a bit but the essence of the message remains the same. If Lumwana was seen as being profitable when copper was less than US$1/lb it remains very profitable now.

Not many investors will have the courage to buy a slice of Equinox just yet, especially as the stock has plunged from a high last year of A$7.05 to recent sales at A$1.80. But, those prepared to take a peek over the lip of the bunker will discover a company which is about to make the grand transition from money going out to money coming in. “I’m hopeful of getting the first revenue by Christmas,” is the way Equinox chief executive, Craig Williams, described the all-important change to...