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Will SCCO's net cash cost per pound of copper exceed $1.00/lb in any 2026 quarter?
Current Prediction
Prediction History
Silver price concentration in by-product credits plus production-cost mechanical compression lifts marginally. Probability lifts from 0.19 to 0.20.
Why This Question Matters
Net cash cost is the direct measure of competitive moat durability. At $0.58/lb (FY2025), SCCO is first-quartile. But 73% of the cost offset comes from by-product credits at peak prices. Rising above $1.00/lb would signal moat erosion from either ore grade decline or by-product normalization, undermining the DEFENSIBLE classification.
Prediction Distribution
Individual Predictions(9 runs)
By-product credits were $1.77/lb in Q4 2025, dominated by silver (74% price YoY), molybdenum ($22.75), and zinc. A quarterly decline requires silver to reverse (now flagged at $54.48/oz — highly elevated historically). Silver mean reversion is possible but typically slow. Moly cycle can move faster. A $1.00/lb threshold requires by-product credits to compress from ~$1.77 to ~$1.28 — ~28% compression. Plausible in a weak by-product tape for one quarter. Probability modestly higher than baseline 19% on silver price concentration risk.
Net cost has been consistently under $1.00 for multiple quarters — Q4 2025 $0.52, Q3 2025 $0.42. For a clear quarter above $1.00, either (1) by-products collapse simultaneously or (2) a production disruption spikes unit costs. Management expects net costs relatively flat. Baseline probability maintained.
Risks that push above baseline: (1) Buenavista zinc concentrator shift reduces copper production concentrate per unit effort — operational complexity could raise cost; (2) CEO transition creates small operational discipline risk; (3) Production -4.7% + cost +5% is compression even before any by-product cycle downshift. If silver price corrects 25-30% in a single quarter (plausible given extreme historical spike), credits fall enough to breach $1.00.
Management has strong visibility on cost structure. 2026 net cost expected flat. No base rate suggests a sudden quarterly jump to $1.00. Probability near baseline.
Slight uplift on silver concentration risk. Silver volatility higher than copper historically — a 25% silver correction in one quarter is plausible. Combined with moly weakness and copper processing volatility, a $1.00/lb breach is within the tail.
Track record of net cost discipline plus management guide supports baseline or slightly below.
Baseline with minor uplift for silver concentration risk. Probability around 20%.
Concentration risk plus production decline creates moderate risk. Probability 20-22%.
Near baseline. No specific trigger visible.
Resolution Criteria
Resolves YES if SCCO reports net cash cost per pound of copper (after by-product credits) exceeding $1.00/lb in any quarter of FY2026. Resolves NO if net cash cost remains at or below $1.00/lb in all reported quarters.
Resolution Source
SCCO quarterly earnings releases or 10-K/10-Q filings
Source Trigger
Net cash cost rises above $1.00/lb sustained
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