I still stand by every single word I have written in this thread.
A
"HAWSONS IRON PROJECT UPDATE" was released today -
https://hotcopper.com.au/threads/ann-hawsons-iron-project-update.7952564/I haven't read the whole thing yet, but here are some things that stick out for me...
Project StatusHIO abandoned the BFS they were working on in 2022. Admittedly this was in the middle of COVID, but the result was catastrophic, from ~$0.75c down to $0.035c today.
There is also more on the timelines later.
They are trying to raise money to complete a new BFS, which will likely be higher than the previous one, or will have a smaller scale and worse economics with much tighter margins.
Lots of words like "potential" and "subject to further" type of statements, so nothing concrete here.
Shares On IssueThey have 919m shares. AKO currently has 95m shares.
After our raise for $3.8m @ $0.15c I am expecting we have about 120m shares.
After this raise, AKO should have:
- a very compelling PFS
- a $XXm DSO starter operation strategy
- 2 large resources within 40kms of each other
- a strategic investor who was selected from a number of proposals from unsolicited suitors
HIO had 121m shares in 2016 and have taken on significant dilution since then, but their project is only at the BFS stage and they a trying to find a way to fund the project.
Depending on the amount needed, they will easily be in multiple billion shares on the register.
TransportThis one is important, especially in relation to my next point.
Basically there is no simple or cheap option for HIO, they need to build some rail, they need to move the ore further than they originally wanted, they will need to negotiate with and pay for other people's infrastructure.
Product, Grades and PricingThis one is very important, they are using a baseline price of $120USD per tonne for 62% material. I don't know (yet) what margin they will make on this.
AKO is using $100/t, but for the DSO at least, should be profitable down to about $60/t.
The other thing I note is they are using pricing forecasts for 2030. This tells me they are expecting at least 5 more years of work and development before they ship their first ore.
AKO could be breaking ground as early as next year if all things fall into place and we get a binding agreement to fully fund the project.
Project Description
HIO have estimated a Davis Tube Recovery rate that is between 7% and 35%, for an average of 12.3% across the project.
AKO currently promotes a DTR rate of about 40% for the resource at Bekisopa. We are yet to have assays from Satrokala, but if the resource is the same or similar, then AKO should be much more profitable due to at least 3X higher yields.
HIO do have a massive resource, but there is also the potential for a massive multi billion tonne resource at Bekispoa and Satrokala.
Project Capex and Operational CostsWe all know Madagascar is much cheaper than Australia, have a look at this link for a bit more detail -
https://www.mylifeelsewhere.com/cost-of-living/madagascar/australia
From a cost perspective, I would much rather be employing people and building a mine in Madagascar over Australia.
(20min delay)