You read all the analyst reports and they model and value Renison on its reserve grade or in some instances the grade it mined in the FY18/19 fin year. I don’t believe the penny has dropped yet on Area 5 and they are waiting for mgmt to feed them the economics. Below you have the exact same assumptions and calculations with the exception of the grade line of which I’ve run a few different assumptions.
Have a look at Area5 grade vs reserve grade (which excludes the Area5 subset) - not only does it drop costs on $/t Sn basis by >45% but it increases output of Sn by 87%... which results in a nearly 8x increase in FCF.. this seems to all be above analysts heads.. Let’s hope management get this Area5 optimisation study out and they articulate this point shown below...grade is king here.
MLX Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
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