With this weeks resource upgrade. I decided to revisit the BFS 12/21 and Underground Scoping study 4/22. I have mis-understood some of the value of the project and maybe so has the market.
The previous resource was 9.2mt @ 0.63% plus Low grade stockpile (LGS) of 12mt @ 0.075%.
However the BFS only included 1.26mt of the resource and all the LGS (page 30 of BFS). The BFS provided a value of NPV of $131m and 154% IRR and only mining the open pit for 2 and bit years. For some reason I thought the value of the project was based on the 9.2mt as there are plenty of other areas that we know has more tungsten (referred to last page in this weeks resource upgrade).
I'm not sure if others understood this or not but it means there is HEAPS of value (technical term).
The upgraded resource to 20.3m and Indicated from 2.4m to 12m gives greater economic certainty, however most of this won't be in the upgraded BFS as the upgraded BFS will only concentrate on the open pit and the nearest of the Western Dyke. It won't include the Underground 2.4mt or the vast majority of the Iron Dukes 5.8mt.
It certainly won't include any of the deposits that haven't been drilled.
To put it another way, we have 1000 acres to farm and at the moment we are only valuing 140 acres.
EQR Price at posting:
4.9¢ Sentiment: Buy Disclosure: Held
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