Ann: ANS: Proposed $100m Placement & Strategic Investment in Sund, page-251

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malmanu

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02/10/18

20:27

Post #: 35968215
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Originally posted by malmanu ↑

SDL is up against the majors at a much higher cost of ore delivered to china because of the proposed US$16/t infrastructure levy by Cameroon on stage1 to repay the US$5b plus loan and interest. Any glut in ore ore will most likely see this project not making much money for some time. The majors are delivering 62% plus ore to china around US$30 whereas SDL project for stage 1 its assumed to be around US$28/t plus the levy of US$16/t , total of US$44/t.

China is increasing its use of scrap and its future growth is slowing down so several hundred million less tonnes of iron ore is needed. Its likely a glut of iron ore will be around by the time this project gets up imo. SDL most likely end up with around 30-35% of the project equity imo after being given US$450m for its share of mine development and working capital until cashflow positive production post 4-5 years of start development, this will most likely value SDL with 21b shares on issue at around 1c or around US$430m at cuurrent exchange rates.

https://www.reuters.com/article/us-...falter-as-steel-recycling-grows-idUSKBN19Q0U3

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The US$430m relates to 100% project value , the 1c share price if the iron ore price is several dollars above their stage1 break even cost delivered to china of US $44/t.

SDL Price at posting: 0.6¢ Sentiment: None Disclosure: Not Held
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Ann: ANS: Proposed $100m Placement & Strategic Investment in Sund, page-251

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