Ann: Coburn Project Commissioning of WCP Advancing Rapidly, page-56

Hi leggy, all good, takes two opinions to make a market and I wishing you the best of luck. I was tagged into a STA-SFX comp on the SFX thread last week which is why I came over and posted.

I'm always suspicious of sell-side analysts. Not that they aren't smart, just conflicted. It's my experience that markets price in the upside well before milestone price drivers are fact. STA flew to 50c in April on LG's analyst tour selling the solid plan to quickly increase Coburn production by another 50%. Great plan... Kenmare, Toliara, Thunderbird, every good min sand deposit goes the same way in a race for economies of scale and higher NPV. How much of STA's price is due to 'buying the rumour' as it were, and how much price upside is waiting for the people who only buy the fact?

The plan has always been to drive STA into the 300 index then hand off to the index funds right. Once the 'dumb money' indexes are forced to buy in brokers can keep the squeeze on and hand the bags over for great profits... a good plan if it comes off. However, all the plans and spreadsheet valuations are only worth the product price assumptions they rest on. My personal judgement of min sand demand-supply balance is probably a lot different MT-LT than most, including the broker analysts. They have to pump out reports for many projects across many industries and aren't paid to look too closely into a bullish thematic (quite the opposite in fact).

Short term (1-2 years) it's all about how big and long the global downturn. 2021 was a perfect storm of covid disruptions continuing on from 2020, RBM closing down multiple times, ILU and Tronox running down their inventories into the global stimmy boom and running out in 2022, a number of old mines in transition to new extensions/replacements etc. I don;t know how soon or hard prices will come off, but I'm confident they will. Here is a screen shot of Asian Metal's market news for zircon today as an example, and I think Europe is heading into worse shape quicker.


Supply is the other side of the coin. Looks to me like an explosion of potential mineral sand developments, driven by a structural and political shift in the market that hasn;t been seen before. Everyone can;t all be building new mines and expansions without eventually hitting the price, and maybe hitting it hard. If too many get up and running, then winter is coming. Not a six-month northern winter, but a GoT, White Walkers and Wildlings from over the wall type long winter...

I'm keeping a watching brief needless to say. Good luck