re: Ann: Maiden 200 Million Tonnes Resource f...
That means someone will provide the ultimate infrastructure solution to SDL and SDL only need to worry about digging the iron ore out and sells them. SDL still needs to pay for using this infrastruture but also may get a share of the profit. In a few years time when SDL has enough cash from its operating profit, it may choose to build another one for expansion. If it still has money lefft, it may buy back the first one.
As to who wants to provide this infrastructure solution, its neighbours including Belinga, Badondo, Avima, but not Nkout which disappears in the latest prsentation.
As to Enterprise value of $0.22 per tone vs $8 per tone for FMG and >$7 for MMX, I guess the management wants to highlight to us that this SDL share is worth $0.13*8/0.22 = $4.72 when in production. This should be the base for the negotiation with the strategic partners who want to invest in SDL project and also buy the iron ore from SDL on a very long term basis. This should include all the major steel mills and possibly Harbinger who just have a few hundred million dollars available by selling most of its stakes in FMG and MMX. What a coincidence!
Also don't forget SDL has 160km2 target area in Cameroon and Congo and highlighted by areas with high magnetic response. It should have at least 100 billion tons of itabirite, i.e 160*0.2*3.3 = 105.6 assuming a depth of 200m. FMG has 21 billion tons? Would that make SDL number 1?
Prduction cost <$20 vs $30 for FMG. Tax rate 0% to 15% vs FMG 30%+.
SDL Price at posting:
13.5¢ Sentiment: LT Buy Disclosure: Held
