Thought I'd add a few things
I've gone through the ann's from the previous vendors. Basically these guys were producing when Nickel was $18,000/t. They made about $7M profit (Excl. depreciation and amort.) from their very first half year operations. Nickel price crashed to like $8-9000/t this asset went into C&M.
What management haven't released is this already has a proven resource (non-jorc compliant) but Ni-43-101 compliant which is equivalent to JORC. Right now they're drilling adjacent to the resource to either
a) find something thats thicker and easier to mine (better margins)
b) expand the resource?
a or b i'm not sure myself.
Which is why that 45m 1.2% hit is so important. The previous vendors didn't drill that from the resource model I looked at (Image below), essentially a extension step-out hole. Ofc they aren't the exact cross section but along the same mineral body towards the right which was undrilled.
As for the other prospects outside of Ban Phuc, I'm not geo professional myself but they seem sub-par with exception of KingSnake which may have some potential.
The main game is extending out Ban Phuc and the huge edge is the low CAPEX risk since the plants been built for us and projects been derisked so far, and it looks quite good on the images and construction pics I've seen.
Essentially according the previous vendors total of 90.7kt of Nickel contained across DSS, MSV and reserves. This was before mining, between 2013-2016 20.7kt of nickel was mined, so 70kt left in ground.
Another vendor estimated there was 119kt Ni containted, however this source is less reliable;
here is a copy of their BFS estimates, I did some mental math gymnastics (not 100% accurate) I couldn't be bothered plotting it out on a excel sheet but the DFS and production numbers remained quite accurate to actual production, ofc until nickel price crashed.
NPV in today Australian terms are pretty much same, they assumed Nickel price of $19.9k/t while current price is really $16.6k/t. However should be noted, given USD/AUD was 1.00 then its now 1.4 so in AUD terms NPV should be somewhere between $65 to 70M AU (mental maths) for starters just using the reserves of Ban Phuc. We are currently $16.5M EV here so thats decent.
Now it will come down to management to drill out extensions and take the strengthen up the resource. There's no guarantees in that and drilling is always high risk, often takes one bad drill result to send company other way - ofc it does help knowing Parsons and Naylor are involved here, adding good amount recent placements on BSX and they took BGL from nothing to $300M MC+, as for the other directors not too familiar with them or chatted with them so hard to have any opinion. But management do hold 12% of shares on issue so they do have interest aligned with shareholders (at least financially) No such thing as free money so everyone should be aware of risks as well, also will need nickel price not to fall below $11k/t. So lets see, I'm liking the sector and this is my preferred play, market might be beginning to wake up to this.
Disc; I bought 9.5-9.9 and wont be adding any more, just holding. Cheers
(20min delay)
