Based on the JORC Probable Ore Reserve of 283Mt @ 26% and the estimated production of 141Mt of pre-concentrate to produce 72Mt of final concentrate at 67% Fe, the numbers give a 21 year mine life at a shipping rate of 3.5Mt per annum (as proposed in the latest Investor Presentation).
I used the those numbers and the following additional assumptions:
Capital Costs - $600m Profit per tonne - $45 (allows for all operating costs as per earlier post) Discount Rate - 8%
From these numbers I get an NPV for Irvine Island approaching $1b. Add the $125m for the remnant Cockatoo ore (doesn't count the stage 4 stuff yet to be proven up) and you get a value of $1.125b which at current number of shares on issue equates to $4.50 per share.
If we were to prove up another 80Mt of high grade ore at the Cockatoo underground we would be looking at double that again as an NPV.
The problem for the market in taking the Irvine Island ore body as an achievable project was always the question of Pluton's ability to raise the capital needed to mine. I think it's just a matter of time before the market realises that the Cockatoo activity largely removes that doubt.
On the other hand, if the Cockatoo underground proves up, I don't have a problem with Irvine being delayed a little while we continue to drag that 68.5% Iron out of the ground, and use the profits from that to eventually fund Irvine.
Or we could get a partner in and get it all going at once.
So many choices - lol.
Cheers
Badfish
PLV Price at posting:
22.5¢ Sentiment: Buy Disclosure: Held
