Porphyry preamble

Ahh porphyries, conjuring vision of untold riches hidden in the bleak hills of the Andes or the mosquito infested jungles of Indonesia and Colombia.

However, ignoring the BS that explo-cos spout about their project being great because in reality, most aren't.

The CAPEX for a decent sized porphyry (or any large scale mine) typically run into the billions. No junior company can ever develop them, and so the best that they can do is entice a major to fund the project beyond the resource drilling stage.

However, ignoring the FOMO-mania that happens when metal prices go crazy, in general, most mining companies like to focus on projects that can support a minimum production profile, for example:

• 100,000 tonnes of copper or 100,000 ounces of gold a year for >10 years

The idea is that the project will pay back the CAPEX (a novel idea), produce lots of cash for many years.

Here is a nice chart from the USGS (link) that displaying CuEq% grade vs tonnage for various copper deposits. Porphyries sit towards the large but low grade end of the spectrum. I've added some annotations and some well known projects.

blue crosses = porphyry projects

Remember: this chart uses the total resources for a project. Many projects have a high-grade core or are a combination of heap leach oxide and higher grade sulfide ores (with economics and cut-offs).

Smaller and/or lower grade projects do get developed, but often they are brownfield projects adjacent to an operation that mined a neighboring higher grade deposit.

What you want is:

• A project that is in the top right part of the chart = takeover target 
• An exploration stage project that shows the potential to get into the top right area.

What you want to avoid are projects that are a decent size >200Mt and a reasonable grade - around 0.6% CuEq or >1 g/t AuEq, or show the potential to get there.
However, grade and tonnes aren't the only factors that impact a project's economics, but it is a good starting point.

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