Ann: Company Insight - Strong Product Markets and, page-2

re: Ann: Company Insight - Strong Product Mar... “If we ever decided to scale up production, it may make sense to mine Railway rather than mining Toongi beyond a certain depth. In Railway’s favour, it outcrops over a greater surface area than Toongi and would therefore deliver us more tonnes of ore per vertical metre.“
More or less what I thought. If they are spending money on that now, it means our MoU partners are looking forward in selling a lot more zirconium down the line, which means we will most likely go for the 1,5 MTPA version after capex for the 1 MTPA plant is paid back ...

“We’ve been looking at a small strategic sell-down of the project to help fund our capital costs. It might be based on a multiplier of the NPV. For example, we think we might be able to get $300 million in cash by selling around 10% of the project.”
At currently <300 mio shares, that would translate to a valuation for the DZP alone of $10 per share …!

“There has also been much interest from government agencies.”
For a current example see http://www.raremetalblog.com/2011/11/molycorp-daido-steel-mitsubishi-corporation-announce-joint-venture-to-manufacture-sintered-ndfeb-rar.html :
"The joint venture will be financed by the three shareholders and by a government subsidy sponsored by Japan’s Ministry of Economy, Trade, and Industry (METI)."
So MCP takes care of part of Japans need for LREEs. Next stop: A similar gov subsidy for a HREE JV with Alkane ?.


“We would also then look at debt facilities. Overall we believe we could keep Alkane’s equity exposure for the DZP to a totally manageable number in the vicinity of $200 million.”
Well, at a SP of $ 10 that would only translate to 20 mio new shares, lol … We’ll see where the SP is after we got a REE off take agreement and the remainder of the financing in place … at a more realistic $5 it would be 40 mio new shares – I could live with that, but would definitely prefer them to use more debt, considering the huge minelife … (or selling the Orange JV to Newmont for 100-150 mio depending on future drill results, hopefully we will know more on that front in Q1)