Your absolutely correct. We have 36 diamond holes down but 40 more are needed to get to JRC. Its a big deposit and the grade and size is evident but not at the certainty level required under JORC.
The company has indicated that RIO/Santos calculated 106Mt @ 0.12%MO average grade after adjusting for known assay errors. The geo reckons when he worked on it back then, RIO held the opinion that its ultimate size was closer to 200Mt @ 0.12%MO.
However the jewel in the crown is the gigh grade core. After adjusting for the known assay error, you have 55Mt @ 0.19%MO (huge grade) and which would last you the first 8 years.
As the certainty increases with more drilling, I would image the share price will reflect it.
Thanks for pulling me up on this, its easy to get carried away.
Using FDL as an example again, its market cap is $140M fully diluted I think and is based solely on a geos conceptual educated guess. It hasn't had a single hole put down. RCH is a $90M fully diluted market cap and has 36 diamond holes drilled to depths of 200M plus a bunch of other geological work such as tranching etc.
If you halve the Moly price and halve RIO's educated guess of 200Mt back to 100Mt my valuation per fully diluted share is decreases to 70 cents. The halving of the size has little effect as I assumed all along that its only a 10 year project and had no residual value after 10 years.
The sensitivity is the MO price. Its $34lb now and if halves that would have a substantial impact on valuation. Thats similar to all resource stocks.
RCH
richfield group limited
