EQR Research BUY $0.12c upside 166%, page-24

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Rob1000

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29/12/22

17:06

Post #: 65472914
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Originally posted by scottm: ↑

So, we are
1. Producing tungsten (cashflow) with hard rock mining starting next year. The processing equipment is in place and management are refining in real world (not in a lab).
2. We have a working quarry (cashflow).
3. We have been awarded a $6m Commonwealth Govt grant after an extensive process. State Govt ministers have been on site and are very supportive. There have been smaller grants as well.
4. Low opex and have local employees (no FIFO).
5. We have a NPV of $210m that is likely to be increased a number of fold as it only includes 18% of the known resource
6. We have an IRR of 397%
7. We have a low cap ex requirement and have the capital we need with little interest rate risk.
8. We are obtaining recoveries 75% to 80% that others globally have struggled to maintain.
9. We have a drilling program that will increase the resource, reserves and NPV.
10. We have 47 other identified targets that haven't been drilled
11. We have a strong JV and offtake partner in Cronimet who are supplying the tungsten globally, with increased demand. Ater 15k tonnes we can buy back the JV for $1.
12. Regal royalty deal was extensive in due diligence and means they don't make any money unless $330m of tungsten is produced. This means this will be a very serious operation.
13. Capacity to increase tungsten by obtaining other deposits in the region and building a smelter.
14. Potential for future dividends.
15. Independent research put a target price of 12c based on the BFS plus a bit with 82% of resource not included. That's up 166%.
16. Other western suppliers struggling to get to production.
17. Managment with proven record of tungsten production (history is showing it's not that easy).
18. Research suggested we could be a takeover target due to the increasing demand in environment where others have falling supply.
19. Xray ore sorting technology allows low grade to be converted into high grade. Not all deposits can use this technology.
20. AND we win AMEC (Assocation of Mining and Exploration Companies) ENVIRONMENTAL AWARD. ESG.
21. It's only an hour from Port Douglas and 2 hours from Cairns.

What AM I MISSING?

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Hi Scottm

I have had a quick read through. Do not know these guy, but it raises a number of question. But maybe I missed something

Can you or someone please explain how "Expenses" are forecast to be only $2.6 million for this year?
How is the drilling they are doing now not "exploration spend"?

EQR Price at posting: 4.8¢ Sentiment: None Disclosure: Not Held
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