RNX 6.67% 1.6¢ renegade exploration limited

not invest at your own peril, page-57

  1. 3,351 Posts.
    Makamint,
    valid questions.

    1] I do not think that there will be anymore institutions coming into the shareholder register. Only because we have approx 35 million shares on the retail register moving around. The top 20 are not selling...this is the key. In fact, Officium Capital [one of the major holders] has been accumulating of late.

    It is important to understand that if there was any interest in zinc, their market cap would be way higher then what it currently is. As shareholders, all we need to tick off is the DFS. They will then be able to get their finance regardless and the market will re-rate them according to their potential cashflow on mine production.

    2] Firms do not really just do exploration and decide to undertake a DFS. This is a huge and costly procedure that consists of hundreds of pages and something the management can use to obtain credit financing. OVR has already done 2 other scoping and pre-feasibility studies prior to this undertaking. Both studies indicated it to be economically feasible for an 'underground/open cut operation'. The latest analysis is that this mine is now 'fully open cut' due to the dense media seperation analysis. This means even lower costs and a longer mine life and resource base. No problems here...cashcost for extraction is 0.43/lb. Thats the current break-even point.

    3] DFS should be completed by the start of next year and the management has explicitly indicated a mine start for the end of 2011 quarter.

    Capstone mining's minto mine is the only other comparable benchmark that one can use in OVR's context. Capstone completed DFS which demonstrated the project's economics in August 2006. It then received the finance facility in October 2006. Mill gets commissioned in May 2007.Commercial production declared in Oct 2007.

    As such, it took them about a year to get this mine to production. Granted the road access was already constructed by the previous operator, but this should give one a benchmark timeline.

    Rest assured, the share price of OVR will be close to a dollar before the mine starts.

    Hope that helps....
 
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