Ann: 80.8Mt Mineral Resource Increase for Lucky Bay Garnet Mine, page-12

First 12 Last

Share
Profile

Follow
dandub

1,023 Posts.

114

19/09/23

16:33

Post #: 69920082
Share

Originally posted by Bobcat888: ↑

Industrial sand mining costs per tonne to the mine gate have generally averaged AUD 110 to 140 dollars per tonne
Diesel has obviously increased in recent times by about 25% to 30% from say 2 years ago.

Important to note: I got a photograph last week of the 7 wind turbine towers installed at Lucky Bay.Anyone who knows the Kalbarri area knows it blows its head off most of the year and wind pretty much everyday.
This should have a payback of probably less than 2 years given they are German second hand wind turbines (so probably 3rd the cost of new) and will significantly reduce diesel consumption.

This must be commissioned shorty i guess? or not far off.

Industrial Garnet on scale for commercial use sells for between $450 to $550 USD per tonne.
Sold mainly in 2 ton bulka bags there are 4 main products ;

2 waterjet
2 main blasting grades

The global market per annumn for both is consistent and stable at circa 1million to 1.4 million tonnes and supply is constrained and limited.

Logistics is your biggest costs.Think global and think where WA is.
Once plant is at stable and steady state and sounds like there not there yet you should be aiming at EBITDA margin not NPAT margin (remember servicing debt lent by MIn Res is an advantage accounting and tax wise)

EBITDA margin should be conservative at circa $100 AUD
EBITDA - high side - guess $150 to $180 per tonne AUD

Positives to come:
1. steady state production to be reached (0r name plate)
2. global distribution begins and goes to scale ( market in Australia is only circa 70k tons per year)
3. Aussie dollar trending weaker - mainly sold USD so good for margins
4. Wind turbines commissioned reducing diesel consumption
5. Significant increase in resource and reserve gives long mine life ...probably heading towards 50 years
6. second phase of production will see production increased to 300,000 tonnes per year and this should be sustainable every year for next 30 plus years
7. Baltic freight rates are significantly down which helps with international freight and logistics costs

So based on 40 years production at 300k tons per year at $100 EBITDA per ton producers $1.2 billion in revenue. not bad

Remember all fixed costs have been invested now,plant ,warehouse ,onsite utilities,wind turbines,mining unit etc.
In sand mining you take 100% of the material ,extract resource and in this case put circa 90 plus percent back.
Its mining costs are consistent with little variation.

Its a cash cow for a very long time and these are the hidden gems in long term sustainable cash flow.

In summary you can see $30 to 40 million in revenue at least for RDG being sustainable in the not too distant future.
There is limited liquidity in RDG shares both ways with Min Res the main share holder with circa 80%.

Stock has to be easily worth 8 to 10 cents putting it at market cap of $250 to $300 million.

Lot of low hanging fruit at 4.7 cents currently with bugger all shares being traded.

Expand

Brilliant post @Bobcat888 - thank you

RDG Price at posting: 4.7¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

First 12 Last

(20min delay)
Last 3.0¢		Change 0.000(0.00%)		Mkt cap ! $88.52M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

Buyers (Bids)

No.	Vol.	Price($)
1	49334	3.1¢

Sellers (Offers)

Price($)	Vol.	No.
3.4¢	2875288	1

View Market Depth

No.	Vol.	Price($)
1	49334	0.031
1	200000	0.030
2	213905	0.028
1	150000	0.027
1	120000	0.026

Price($)	Vol.	No.
0.034	2875288	1
0.035	183527	1
0.037	225335	1
0.038	150000	1
0.040	63539	1

Last trade - 16.12pm 28/05/2024 (20 minute delay)

RDG (ASX) Chart

Day chart unavailable

Ann: 80.8Mt Mineral Resource Increase for Lucky Bay Garnet Mine, page-12

Featured News

Cleaning up: Why CWY is Wealth Within's Hot Stock tip

Market Close: ASX dips under with only Staples in the ascendancy

Matador drilling picks up new gold zone in Canada across 1.2km of strike

Downer Wins $600 million water services contract in Queensland

Winsome sees Adina lithium project's resource rise by a stratospheric 33%

Buyers (Bids)

Sellers (Offers)

Featured News

Ann: 80.8Mt Mineral Resource Increase for Lucky Bay Garnet Mine, page-12

Featured News

Top Stories

Cleaning up: Why CWY is Wealth Within's Hot Stock tip

Market Close: ASX dips under with only Staples in the ascendancy

Matador drilling picks up new gold zone in Canada across 1.2km of strike

Downer Wins $600 million water services contract in Queensland

Winsome sees Adina lithium project's resource rise by a stratospheric 33%

Buyers (Bids)

Sellers (Offers)

Featured News