Had a good chat with Mike today at a presentation at Macquarie.
Once again, Mike came over very well and was as passionate as ever.
The standard stuff was covered, but he did provide some “back of the envelope” figures and timelines for Nowa Ruda.
** Please note that these figures really carry no weight officially just yet given they are yet to be confirmed by the Feasibility Study process. That being said, these are figures that the Company are working with at the moment and it’s easy to see why the Directors are all pretty hyped. **
Production
1. First Production = 2017 * Feasibility Study Completed = 1Q 2015 * Licenses and Permits and Funding = 2H 2015 * Development of Mine = (2H 2015 – 1H 2017) 2. Total estimated capital cost for mine restart = $150M. 3. Initial production 1.5mtpa, ramping up to 2.5mtpa (two deposits producing). 4. Mine life = 25-30 years (based on 50Mt mineable reserves).
Financial
1. Estimated total operating cost (to end user coking plant) = $60/t - $70/t (Based on the benchmark of 17 existing UG coal mines plus modern equipment). 2. Current sales price of similar coal in Polish coking plants = $150/t 3. Estimated Operating Margin = $80/t 4. Estimated EBITDA = $120M pa (ramping up to $200M) 5. NPV = >$1.1 billion 6. Repayment of capital = 1.5 years
I’d like to see a Scoping Study/Pre-Feasibility Study out in the next few months. Not sure if that will happen or not. I think it needs to if at all possible and have expressed this to Mike.
Mike is always pretty tight lipped as far as movements on the register go, but I did ask who has been doing the conspicuous on market buying, i.e. “the guys with the deep pockets” that we have all noticed on and off over the last 6 months or so. It seems that “a couple of funds” have been buying on market since November 2013 when the volume started to pick up. Great news in my mind, as the big end of town doesn't buy into just any old company at this end of the market. Mike didn't comment on who they were. It seems that it’s been a matter of the funds mopping up the selling by the small guys which again is good news, as the big guys are in BMB for the long haul, ... firm hands. There are also some traders spoiling the party as well, .....lol as per usual.
It sounds like NR is getting plenty of interest in Europe, with a number of large organisations knocking on our door expressing an interest in the project. These sorts of players are unlikely to get involved in a major way at this stage of the game but it’s good that they are keen nonetheless. They are most likely to get involved as the project gets de-risked further which is fine by me as the project will be worth more further down the track and they will have to pay more for their involvement whatever that may be.
Our drilling campaign at NR is going well. We are about to finish the first two holes and have started on a third with the other rig. Once the rigs are finished holes 1 and 2, they will then start drilling holes 4 and 5. It looks like it takes 5 or so months per hole with this sort of resource. We have 3 rigs operating. We are drilling 5 holes.
The $15M should be in by the end of the week or at the very latest the end of next week.
Togo, ......... well we are still waiting and again Mike reiterated the fact the in his eyes NR is just as good if not better than Togo. Operating in Africa obviously has it's risks and it sounds like the CapEx for Togo will be pretty big compared to NR. I have no idea of the commercial terms of the tender so really it's pretty hard to make an informed decision on Togo either way.
Should anything else come to mind later, I’ll post it to this thread.
BMB Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
