ABSOLUTELY COMPELLING ECONOMICS, page-59

First 59 Last

Share
Profile

Follow
Vfanatix

512 Posts.

92

04/05/22

17:34

Post #: 61206459
Share

Originally posted by Johnyb888: ↑

I just want to put this out there as to prevent unnecessary disappointment.

I don't believe the resource upgrade is going to impact the short term price a whole lot and I very much doubt it will cause any significant rerate.

the reasons for that are:

1: The current recourse is 400Mt of concentrate in all 3 categories (proven/indicated/inferred). However there is plenty of evidence and communications/information out there that the ore body is in fact much larger! The ore body is also quite homogenous. So although we don't know the exact boundary of the resource I is likely to exceed 1billion ton worth of concentrate, which is already known to the market. Whatever the resource upgrade will show, it will certainly not cover the entire actual inground resource. It's essentially just ticking a box for acquiring finance to have actual prove it is there.

2: Unlike what is being said here the resource upgrade will only have a limited impact on the NPV (certainly not +50% or anything like that!) unless it comes with increased production. It might make the 20Mtpa more viable to have the bigger resource but I don't think it likely they will aim to go above 20Mtpa. Due to the mathematical workings of a NPV, which has a discounted cash flow model, the extra income of the increased resource would only be expected to start coming in after 20years of production...Any cashflows at that time will be very heavily discounted and add very little to the current NPV (this is one of the limitations of the NPV model I suppose). Most NPV models only use 20 or max 30 years since adding anymore makes barely any difference. A dollar in say 24years (assuming 4years to get to full production and the 20years to mine the current resource) is simply worth very little....I mean what would you pay today to get a dollar in 2046? With all the uncertainty of inflation and the potential to just get 10% returns in the broader markets or general investments, I would say very little!

IMO the real big price catalysts would be a binding off take (hopefully with some finance towards capex), pilot plant results (proving the whole process, energy savings and quality of the product) and obviously any type of finance and the BFS.

I hope I am wrong but apart from maybe a small increase in the price I don't see the resource upgrade make a big impact. But it might be really hard to say either way with the huge swings we are having at the moment. What is noise and what is news based moves?

Expand

The most accurate and grounded, realistic post I've seen in a while. Thank you for this level-headed perspective.

HIO Price at posting: 64.0¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

Reply

Top Stories

COB

Cobalt Blue sees A$60M price tag for Kwinana, WA refinery – but $68M value for stage one

COD

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

ACW

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

RCE

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

MXR

Maximus jumps 7% as it unveils latest gold drill hits at Eagles Nest; grades up to 15g/t

There are more pages in this discussion • 743 more messages in this thread...

First 59 Last

Add HIO (ASX) to my watchlist

(20min delay)
Last 2.4¢		Change 0.000(0.00%)		Mkt cap ! $24.39M

Open	High	Low	Value	Volume
2.4¢	2.4¢	2.4¢	$1.11K	46.24K

Buyers (Bids)

No.	Vol.	Price($)
4	242631	2.3¢

Sellers (Offers)

Price($)	Vol.	No.
2.4¢	3756	1

View Market Depth

No.	Vol.	Price($)
4	242631	0.023
6	197320	0.022
8	600810	0.021
13	2553325	0.020
3	74471	0.019

Price($)	Vol.	No.
0.024	3756	1
0.025	677445	2
0.026	691826	1
0.028	746290	3
0.029	456257	3

Last trade - 11.26am 02/10/2024 (20 minute delay)

HIO (ASX) Chart

ABSOLUTELY COMPELLING ECONOMICS, page-59

Cobalt Blue sees A$60M price tag for Kwinana, WA refinery – but $68M value for stage one

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

Maximus jumps 7% as it unveils latest gold drill hits at Eagles Nest; grades up to 15g/t

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

ABSOLUTELY COMPELLING ECONOMICS, page-59

Top Stories

Cobalt Blue sees A$60M price tag for Kwinana, WA refinery – but $68M value for stage one

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

Maximus jumps 7% as it unveils latest gold drill hits at Eagles Nest; grades up to 15g/t

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News