Hi All,
It's very nice to have people so concerned about where I am and what i'm doing. You'd think when your own stock drops 30% and effectively announces trading insolvent my life and musings would be second fiddle.
My Post #:
66858958 on 20/03 post feasibility release pretty much remains my sentiment and outlook. Nothing tangentially has changes better or worse since then really. Except below.
"Nothing massively differing in my opinion from Post #:66795745.
"Spot pricing is a good proxy - but it's more important whether the REO meets the projected forecasts. If the REO pricing doesn't rise (big if), then IXR will likely need the refinery/sep facility bundled in. Similar to what most other developers are arriving at. The contingency to both those plans is progressing magnet recycling to commercial levels. noting that is expected to grow to around 40% of REO supplied products."
Positives (when compared to SS);
-Ore Reserve is solid
-Only Stage 1 Production profile
-Capex Hurdle still relatively low
-Used a more realistic Sc credit (average 15tpa of LoM)
-5mtpa from day 1
Negatives
-Recoveries decreases (Using PH2 now to keep impurities low)
-AISC increased (largely driven by recovery decrease)
-Doesn't present scenario of ramping to 10mtpa
So to go back to my bolded point - my main takeaway and now what i foresee as the biggest risk to viability for the Makuutu Mine (not their refinery/magnet recycling business) is the REO pricing.
The FS assumes a REO basket price roughly double what the reported spot REO price is today (via SMM).
So there's a couple options;
1) The REO price increases as per forecast between now and Q4 2024 and the figures in the FS will reflect reality. The NPV's from the Sep/refinery facility are then a bonus.
2) The REO price does not increase as per forecast and the separation/refinery facility is now required to show attractive viability from mine to refined product based on lower than forecast REO prices.
So based on this FS alone and treated in isolation - it pretty much depends on what people believe the REO price will be come Q4 2024 or when IXR aim to be in production.
The refinery/Sep facility scoping study de-risks the aforementioned point because it will show their is more profit to be made in going further downstream and 'value add' on the products.
-Key news pieces now for me will be the MLA award, securing more than the 60% project ownership and the SS for downstream refinery and economics therein. Probably some other left stuff field that could come - but these are planned announcements."
@Maverick7 Thanks for the tag. The recoveries I had presented were what was in the previous met work. Agree and recognise that the feasibility study now has lower recoveries due to a ph2 leach being utilised to lessen deleterious impurities making it's way through the flow sheet.
This is roughly what average annual revenues look like using the SMM spot price. Noting comments in Post #:
66863668 indicate this is probably the most bearish of REO prices compared to other sites etc.
As of today. Nd Pr have almost halved from their heights. No one really wants to address this in their own backyards because if one was the re-run their revenue based on current spot price of SMM there's very few if any that have feasibility studies which would show them to be profitable.
To me the S/P is mainly driven by the REO price. The 9c high almost correlates spot on to the Nd/Pr being $150,000 usd. Now currently halve that. Interestingly in the last week or so the HREO prices have started to bounce back, whilst LREO still fall. Those more beholden to Nd,Pr will have had a greater impact to their projected revenues.
So it goes back to my previous point.
If the REO price remains at this level IXR will need to sep/refinery to bring the economics back into the green.
"Anyhoo - Will keep an eye on the REO price moving forward and await further news re; refinery and magnet recycling arm. If one was to plug the SMM (shanghai metal market) REO spot price into a lot of feasibility studies they look pretty average or aren't profitable.
Future state is IXR can de-risk itself from just being a mine, via toll processing from a sep/refinery facility and/or recycling magnets. Out of the many asx listed and western global listed REO plays, very few are progressing magnet recycling as part of their commercial strategy. This is despite the fact that it's expected to be 20% of the source for REO current and growing to 40% in the future."
Oh and i'm always pretty transparent with disclosing my buy and sell targets ahead of time which i stated back on 16/03 in Post #:
66795745
"For full disclosure i took some small buys in low 3's and waiting for the news result and the share price reaction before deciding what to do from there. If it were to drop down to that 2.3c range it's probably the range i'd increase more. (of course this relies on robust economics and some de-risked regarding the ML and the SS for the refinery. Spot pricing is a good proxy - but it's more important whether the REO meets the projected forecasts. If the REO pricing doesn't rise (big if), then IXR will likely need the refinery/sep facility bundled in. Similar to what most other developers are arriving at. The contingency to both those plans is progressing magnet recycling to commercial levels. noting that is expected to grow to around 40% of REO supplied products."
I think i post less on HC across all the stocks I hold, than others do in one they don't. My general retracing in posting frequency across HC and Twitter in general is as per Post #:
66795745
"Still here FWIW - just not as active on HC - People will note that my posting frequency across most stocks has lessened.
Also, i typically limit allocating time to posting information requests whilst being undermined in the same sentence."
Important items to watch for the future;
-Improvements to AISC. (further leach improvements being investigated)
-ML award. (obviously de-risking to be able to mine)
-Sep/Refinery SS (This will boost end to end economics but also provides a toll processing option)
-Magnet recycling (De-coupled from REO impacts somewhat - provides sustainable REO supply solution ex-china and can be commercially implemented anywhere. Post #:
66923833
Reach me on twitter - if anyone would like to chat direct.
SF2TH
(20min delay)