Congrats on your acquisition, it really is a steal at these prices, but there have been some large holdings that are being liquidated which have kept a cap on the price.
Whilst this is a frustration, it is also an opportunity. We know the timeline for the news flow, and if the price was higher, my portfolio might be a lovely shade of green rather than a very deep red, but I have been extremely fortunate in that I've been able to more than double my position in the last few months off the back of the raise and the persistent selling.
A couple of bullet points as to why I believe at least $10 share price? - ONLY 8,000m of drilling so far has proven up: --- 8mt of DSO. It looks like we may not have to drill and blast the material, which would be significant cost savings. --- 36mt of DRI grades under the southern zone DSO --- 160mt of "fresh rock" magnetite that should also upgrade to DRI with a 75 micron grind, but worst case the early announcements state the material upgraded to better than 62% at a 2mm (or less) crush. --- Compare the "grind size" for DRI grades, MGT, HIO are about 15 microns, Iron Bridge is about 35 microns, again, we are 75 microns, and Paul said he might trial at 100 microns - the Bekispoa northern zone is still open at depth - There is speculation that Bekisopa - which is just 6kms of strike - should be at least 500mt, and could be as high as 1Bt - https://www.akoravy.com/bekisopa-exploration-summary - Satrokala is getting its maiden drilling campaign as we speak - off the back of the very exciting electro magnetic survey - There a something like 6 known magnetic anomalies at "Satrokala", totalling approximately 35kms of potential strike. - We don't know anything about the resource at Satrokala, so it would be remiss to speculate, but you would expect that there is a degree of "nearology" when it comes to the properties of the resources. --- IF the resource is similar to Bekisopa, and we know the electromagnetic survey results suggested the resource could be up to 1km deep, so the potential for a multi billion tonne resource isn't unrealistic. --- Think about "the Pilbara" as a region, and the fact that it spans an area of 500,000km2 and the commonality across the various resources, and it isn't an unreasonable expectation that 2 resources that are 40kms away from each other should at least have similarities - https://www.akoravy.com/our-projects - Tratramarina is literally on the river, the transport costs should be extremely low - https://www.akoravy.com/tratramarina - Ambodilafa is a bit of an unknown - Obviously there is the upgradability of the ore, the low impurities as you point out, and optionality to produce high grade (non DRI), or very high grade DRI material - Then there are the costs. --- Low capex DSO starter - $50m - $60m, we should make that back in the first 2 years as we scale up the operation --- DSO opex is about $45/t, but given the "soft nature" or the material and the ability to optimise the logistics, costs could come down further --- Some of the lowest wages in the world. I don't expect the company will exploit this, but look at the cost of wages in Australia, North America and Europe, and we should have 75% lower wages (I did a post on what Champion Iron spent on salaries for their staff, and the savings are significant) --- Very conservative transport / logistics numbers. There should be numerous opportunities to increase frequency, use larger trucks and potentially add trailers --- Don't get me started on potential from a slurry pipeline, there are a lot of benefits from being predominantly down hill, and the potential to built a pipeline that could handle 5mt to 20mt of material per year which should have an operating cost of less than $5/t - down from about $28/t in the scoping study. - We should have sub 200m shares on issue by the time we get to DSO production, potentially sub 150m shares depending on the type of investment --- FEX have 634m shares on issue with a $300m market cap --- Champion Iron have 518m shares on issue with a $3B market cap --- FMG have 3.08B shares on issue with a $58B market cap (they predominantly have low grade material, but they are very excited about Iron Bridge)
There is so much other stuff and various other opportunities for the company to add revenues and margins that I see nothing but upside.
I am sure there are other significant things I have omitted, but if all of this isn't worth $2B / $10 per share (assuming 200m shares on issue by the time we go mining), then I'd be happy for you to call me out and shame me because we only made it to $5 per share
AKO Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
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