Thread by @METhompson72

#copper $MNO.v
So a quick thread on why VMS type copper deposits are so much more valuable than porphyries.
(I am talking in the generic here, and each project has its own specifics so please do not message me saying I am wrong about such and such project!)

VMS = Volcanogenic Massive Sulphide are “black smokers” emplaced on the sea floor and then moved to surface via tectonic activity. They are almost always polymetallic and contain copper, zinc, gold, silver, zinc and lead.

VMS’s are found around plate boundaries and usually occur in clusters – or “camps” – such as Flin Flon, Bathurst or Noranda. Tonnages typically range form a few million tonnes of ore to +100Mt. Copper equivalent grades are typically 1.5% ish.

Porphyries are magmatic intrusions associated with plate boundaries and are typically between 100Mt and +1Bt. They often contain a gold credit but are lower grade than VMS’s – copper equivalent grades are typically 0.5% ish.

In the last cycle M&A transactions on porphyries averaged around 3c / lb of contained copper and VMS’s around 30c /lb. 3x the grade, but 10x in value – why?

VMS’s are typically closer to surface and have a lower strip ratio than porphyries. Let’s assume 1:1 for a VMS and 3:1 for a porphyry (you need a bigger pit to go deeper.)

Porphyries also need a much bigger processing plant as you are processing ore at one third of the grade of a VMS. Capex is therefore much higher.

VMS’s metallurgical recoveries are typically higher for a VMS – maybe 95% Cu and 90% on Au - versus a porphyry at 85% on copper, and 70% on gold.

Capex for a VMS is much lower per tonne of copper capacity as you are building a smaller pit or underground mine, and a much smaller processing plant and mine waste facility.

Taking Cu price at $10,000 then:
0.5% Porphyry = $50 rock with a $40 per tonne recovered value
1.5% VMS = $150 rock with a $135 per tonne recovered value

Mining costs at $5 per tonne are $10 for a VMS with 1:1 strip ratio, and $20 for a Porphyry with a 3:1 strip ratio. Processing costs for both let’s call $10 per tonne.

Profit margin on the Porphyry = $40 - $20 - $10 = $10 per tonne of ore
Profit margin on the VMS = $135 - $10 - $10 - $115 per tonne of ore
This is why VMS deposits are worth 10x per contained pound of copper than a porphyry.

Meridian Mining $MNO.v Cabacal project is a VMS deposit, with exploration potential to be camp scale. The above is why I own this stock instead of any porphyry projects.