Both companies have similar in deposits and feasibility studies, but at face value SRK seems very undervalued compared to FEX. Below is a brief analysis...am I missing something that would explain variance in valuation? I guess some premium can be attached to the fact FEX is 3-6 months ahead in approvals and contracts.
FEX
Market cap $50m
Iron Ridge Project
1.25mtpa, ~4 year life
NPV $54m @ $111/t iron ore priceC1 cost $76/t
SRK
Market cap $22M
East Paulsens Project
1.5mtpa, ~4 year life
NPV $40m @ $100/t iron ore price
C1 cost $65/t
Iron ore prices withstanding, as SRK gets closer to production, I see no reason why valuation should not match or exceed FEX. If anything, the economics of SRKs East Paulsens are more robust than Iron Ridge. This also attaches no value to SRKs other projects. Seems cheap at current price!
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