@Natalina - pay attention to posts from
@zacko92 as well and don't just listen to what you want to hear. Zacko raises some valid points, including around 20Mtpa v's 100Mtpa and that there is a lot of guess work at this stage around NPV's.
In terms of what production will actually happen, what NPV will be used in some way for market value buy out of CLE's 25% interest - my thought are that like any potential mine they will run a number of scenarios from 20Mtpa to 100 Mtpa, with some scaling production. The best NPV and IRR may not be what Vale decide to adopt when they make a decision to mine, but the various options would probably be considered when working out the market value for a buy out of CLE's interest.
For those saying we do not yet know enough information to think about a reliable NPV and there is too much crystal ball gazing - then come back and look at what you are getting for the current market cap of $75 million and compare that to the market cap of other junior resource shares.
As I noted above (with updates), CLE currently has
- a large resource and potential to expand if needed;
- resource is in a mining friendly low sovereign risk jurisdiction;
- there is access to nearby rail, port and hydro power (three things that can be lacking in other exploration companies and a big hurdle to getting into production) and whilst some upgrades for higher capacity may be needed, its cheaper and easier to upgrade existing than to permit and build from scratch;
- CLE has completed customer trials and will be producing high purity iron that is required for the developing green steel industry - therefore good long term demand and potential extra premium if there is a shortfall of suitable ore for making green steel - listen to CEO video posted here to understand why magnetite iron ore is important and essential https://hotcopper.com.au/posts/77951598/single - Canada has listed high purity iron as a critical mineral;
- CLE has attracted a JV partner that will potential spend up to US$138 million to get to a decision to mine
- the quality of the JV partner - you could not ask for a better JV partner to develop a high grade magnetite iron ore mine than Vale as they provide both funding and expertise
- there is a clear pathway to either production or buy out should Vale prefer to buy out Cyclone's interest at decision to mine stage.
There are plenty of resource stocks with similar market cap's that do not have half of the above.
