I'm here guys, I started typing a response yesterday but was...

I'm here guys, I started typing a response yesterday but was interrupted and then had other plans...

My first thoughts on the announcement were similar to the market, not great. I sold 1/3rd of my position immediately at a sizable loss. I don't get angry about it anymore, the game of investing in mining juniors is full of triumph and disappointment. I guess I'm just accustomed to it after all these years. Losses do come in handy when you have successful years and understanding how tax works is really important to investing. I took big losses during the GFC (like most), however, the subsequent years after were some of my best gains ever. Thankfully because of my realised losses I didn't have to pay the government much money - cash flow without tax - disappointment and despair washes away quickly (you can add the tech boom of the 90's to that scenario, similar, but not as dire as the GFC).

Back to RNU and that announcement.

I was surprised at the strength and buying throughout the day, this gave me pause on further selling and led me to question my initial reaction. I do remember writing last year that there was a possibility that purity (if an issue) would require further cleaning, which would obviously compromise flake size via re-grinding and extra float. Also, at worst the ore would need chemical treatment. At the time, I thought even if this eventuated I must remember that the deposit is unique (flat lying and big) which will yield ultra low mining costs. Hence, if extra circuits are added to the mill or chemical treatment is required this may not render the project uneconomical. It all comes down to mining costs and as you all know, I believe it will be in the lower cost quartile globally (including Africa).

What now?

RNU can achieve +99% purity, this is battery grade. We know now the compromise to achieve the industry standard will be to sacrifice flake size. This impacts the revenue basket and pegs it down a notch or two. Still RNU's flake and deposit size dwarfs HXG which is valued at ~$60M. Purity versus RNU? I question HXG's process, I believe they have lots of re-grinds and extra floats to get there which leaves them with the lowest flake basket for purity especially compared to RNU.

***Sorry guys, have a lunch to attend and not enough time to continue my long winded thoughts. I will be drinking a fish bowl of fun today so will hold off on posting the remaining diatribe until tomorrow...

Cheers
Seth