Let's put some real numbers to this, using the latest of many Chinese magnetite deals: Cape Lambert's sale of 70% of their namesake magnetite project to Best Decade Ltd. This deal was conditional upon proving up of a 300Mt resource to JORC status, implying a $1.17 value per tonne of JORC resource.
This allows CFE to fund the development of the project without dilution, with exposure to 30% of the earnings. Let's not forget that this rule of thumb amount per resource substantially undervalues TRF's resource due to the superior nature of the magnetite and its recoveries, this would mean that even at this price per tonne, assuming they prove up the minimum of their 300-600Mt resource, they could sell around 50% of the project and fun this while retaining rights to all the uranium and other interests without dilution.
On the 44Mt they have already proven up, the current market cap is justified, not accounting for the fact that it is pretty easy to prove up magnetite resources etc. Prove up 300Mt and its a whole different ball game. 600Mt and we start talking silly numbers and 600Mt wouldn't be out of the question or unrealistic given the usual magnitude of magnetite deposits.
Wait the 6 months. I'd bet a deal will be announced well before then. Then we can focus on the uranium and other upside ;)
TRF Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
