Thank you Malmanu, You make some very good points there. At the...

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Lion2009

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02/10/18

20:58

Post #: 35968350
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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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Thank you Malmanu,

You make some very good points there. At the current IO prices the Chinese are happy with the supply, demand ratios.

To further this the Cam Govt are struggling to repay the loans from the PRC now.

That is why the Chinese Govt will hesitate to make further investments into the country.

The Port and Rail being the single biggest investment ever in the country.

I cannot see it happening anytime soon.

SDL Price at posting: 0.6¢ Sentiment: None Disclosure: Not Held
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