Note that my research on Wowo Gap has found that based on all the historical work, the PNG government is confident to quote a JORC of [email protected]%Ni Equiv
Valuation As its a laterite Project I'd say once the JORC is firmed up a $1000/t EV is appropriate (Note Spot $35k - $50k/t)
For now until we recieve assays and confirmation of the mineralisation I will use $100/t Ni EV
Now the mian points are 1. Although the current JORC has a low confidence level, detailed research of PNG databases has revealed a JORC of [email protected]%Ni Equiv is being quoted, so there is plenty of upside to the jorc, this in turn has greatly increased my confidence in the project.
2. Given the huge technical and infrastructure costs, a JV with a major is a must! = Farming out/down of interest, but see HIG, they sold a majority stake in Ramu ([email protected]%Ni Equiv) to the Chinese so a JV partner shouldn't be a problem
Blackstone/Michael Hills Ni/Cu/PGE/PGM, 25% Free Carried by RDS, Musgrave Province W.A. The project is 30Km's away from WMC's Babel and Nebo Nickel Sulphide deposits,
While its early stages, Patersons are highly encouraged by the work so far and belive that RDS/RMI are onto something quite promising here
Valuation I like Patersons fully agree that the bulk of RDS's current mkt cap is attributable to these projects, Hence a comparative valuation can be made
Argyle Iron, 75%, W.A. near Wyndham JORC 17Mt@55%Fe
Unfortuantely this deposit is somewhat stranded and RMI will need to show a clearer path to development before I will value it properly,
However apparantly their has been strong Chinese interest in a potential JV, once one appears I will re value this project
Valuation As stated, due to development uncertainty the project only deserves an EV of $2.50/t vs $5/t I was happy to use for CUL's
17Mt@55%Fe = 9.35Mt, 75% Interest = Net 7Mt's Fe 7Mt's Fe @ $2.50/t = $17.5m = 4c RMI
If a chinese JV or clearer path to development appears I will be happy to use $5/t = 8c RMI
Qld 3 Rivers Ni/Cu, 10% Free Carried by SRL, Greenvale Qld SRL should have drilled 3 deep holes to test for NI/Cu sulphides, not sure where this project is at
Summary
- WOWO could be a company making project, remember JRV's run? 400% in a month based on its huge laterite Nickel Project - The RDS JV underwrites/implies an SP of 9c-10c - The Argyle Iron Ore Project adds 4c in spec value (8c once I see JV etc)
Total Value I see pre Wowo Gap rerating = 23c After more confidence in Wowo = 40c+
__________________ Note: I am not a Financial Adviser, nor are any of my posts intended to be financial advice, they merely express my own opinions
-------------------------------------------------------------------------------- Last edited by YOUNG_TRADER : 10th-July-2007 at 04:32 PM.
HARD TO IGNORE AND OVERLOOK THE HUGE UPSIDE POTENTIAL
IM IN THIS UNTIL 18 CENTS MINIMUM; UPON WHICH TIME I WILL THEN CONSIDER MY POSITION
........... ........ ..... ... .
RMI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)