Grange Resource has spent more than $180mil on its South Down project so far and is still spending more money to complete its DFS. That is the money spent over the last 10 years or so. In today money terms, it would be easily more than $240mil-$250mil.
It did look at 10mtpa for LOM of 14 years for total production of 140mil tons of magnetite concentrate of Fe69.5%.
It is now planning to revise annual production target in its current ongoing DFS down to 5mtpa for 28 years for total production of 140mil tons of concentrate.
HIO was looking at 20mtpa for 20 years for total LOM production of 400mil tons. Its total Exploration Target resource is at average of more than 2bil tons of concentrate.
Someone asked me the question of fair value of Hawsons project in a TAKE-OVER situation before after I made a point of shareholders should band together to defend a dirt cheap take over offer of 25c-30c. At 30c offer, it would value the project at around $240mil based on current SOI and options. What this means is basically the TAKE-OVER party says "hey, I pay you for what has been spent on the project and I get the project for free". And remember Hawsons's LOM total production is now 400mil tons concentrate = 3 South Down projects combined together with AVERAGE potential Exploration Target Resource of more than 2bil tons of concentrate.
Just compared to the scale and resource alone to South Down project and the money spent on South Down project, if a take-over happens a rock bottom dirt cheap offer must come at more than $1 to begin with and when you look deeper into the potential AVERAGE resource of more than 2bil tons of concentrate, it is worth multiples more.
HIO Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
