Client Name

Ark-Metals

Faculty Advisor

Mr. Mohammad Sohaib Saleem

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

The project required us to create a financial model for a copper processing plant. We were tasked with identifying by which year the plant will be feasible and able to payback the CapEx while creating a profit. This is an important analysis for investment decision making as a copper processing plant requires over a billion dollars of investment and is an important decision to make. The model turned out to be a 7 year forecast until the payback and allowed the company to assess whether its a wise decision to make this investment.

Aligned SDGs

GOAL 9: Industry, Innovation and Infrastructure

Aligned SDGs Justification

SDG 9 (Industry, Innovation, and Infrastructure): Set up processing centers in the area where extraction takes place, which will create strong industrial infrastructure in Balochistan. The use of modern semi autogenous (SAG) brings technical innovation to Pakistan's mineral sector and helps the country to avoid the dependence on foreign processing options.

NDA

No

Abstract

The project delivered copper resource mapping for the Chagai belt, copper concentrate production forecasts, global and regional copper market analysis, a benchmark-based financial model, and a processing facility feasibility assessment. Sensitivity tables were also developed for copper grade, copper price, capital expenditure, recovery rates, cash flows, and other assumptions.

The study used secondary research and assumption-based modelling, drawing on public technical reports, market data, company disclosures, and industry publications. The Reko Diq technical report was used as the key benchmark because it is the closest recent large-scale copper-gold porphyry project in the Chagai region.

The base case is financially positive at a copper price of US$4.03/lb, concentrate grade of 24.18% copper, head grade of 0.48%, after-tax NPV of US$202.9 million, and MIRR of 1.29%. The model assumes total capex of US$2.0636 billion, expected spending of US$1.6896 billion, ore processing capacity of 15.723 Mtpa, and concentrate output of about 256.6 ktpa.

However, the project is highly sensitive to grade and price. At 0.35% copper, NPV falls to negative US$1.0879 billion. The model also shows a US$1.728 billion pre-production cash shortfall in 2033 and payback of around seven years from first production.

Overall, Ark Metals should proceed only after confirmation drilling, a JORC or NI 43-101 compliant resource estimate, Ark-specific engineering capex estimates, and conservative model reruns. Otherwise, defer construction to reduce financial risk.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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