Looking goodIt was good to see the wipe out of the 60c line over...

Looking good

It was good to see the wipe out of the 60c line over the last couple of days particularly with a Rights Issue in progress.

So Red Hawk has issued a Scoping Study with good project metrics. A PFS is now underway and due for completion Q1 2024. The two major shareholders say they are supporting the RI which amounts to $5.1m and should be sufficient to fully fund the PFS particularly with some others that will take up their entitlement also.

What are the expectations of the PFS? I am speculating that there will be an acceleration of the targeted tonnage over the first few years. Maybe up to 5mtpa year 3 or 4! The already good project metrics may substantially improve with the recently announced resource upgrade and likely accelerated and increased tonnage targets. My guess is that SM will not be happy with just achieving his remuneration targets but decisively smashing those targets.

For those contemplating a TO. That may or may not happen but if it does the TO price will get higher and higher as RH moves though each milestone to production and profits. Might contenders include FMG, RIO, Hancock, maybe MIN and TIO? Seems like TIO are supporting the current management direction and performance shares. No such thing until relatively recently. Is TIO still a contender, or happy to hang in for the ride, or do they want to build up the business and exit for a premium? Don’t know, time will tell. Not sure it matters much at this time. Regardless, shareholders need to see RH build a viable and highly profitable business ASAP.

As we progress substantial upside may come from a viable new port nearer to RH deposits. I think the reality of this is not an “if” but a “when”. May take a few years but a paradigm shift and maybe a 7-10mtpa operation with substantial margin improvements.