Brilliant news. They have excellent track record with buying Oz Minerals at the lows in 2016 and it re-rated soon after.
It will give many risk averse Australian PM’s confidence to buy AMI and this will drive the stock forward
AMI are going to have to adjust their cost forecasts in January. They will material outperform due to higher base metal prices and they will reduce the AISC forecast to $1200-1400.
KKR can clearly see that just Federation is worth more than the market cap of $500m. First production in 2023, resource continues to grow and maybe they even build a new mill and target 1mtpa. It will print cash. Remember that in 1989, Rio Tinto thought Peak had 4.5mt at 6.5g/t - smaller and lower grade than Federation - and we are still mining the Peak over 30 years later.
Life must be getting far easier at the Peak. Kairos grades would be feeding through and they only need to increase production from this stope to hit their lazy budget. Kairos still getting bigger which means less rush for Great Cobar and staged capital investment.
Great Cobar may end up earning its moniker and ‘Make Cobar Great Again’. It appears to be increasing in grade with depth with a recent deep October intercept of 13m at over 6% Cu equivalent. I will be selling red caps at $50 a piece if this continues.
AMI Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
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