Good detective work all.
The purpose of the Maiden Ore Resource Report was to provide the basis for the PFS. It derisks the project and allows forward looking statements to be made, as well as satisfy bankers etc that third parties have reviewed project fundamentals.
Key point being, it is not the PFS and should not be read as such.
The clarifying statement in * made it very clear that they are yet to optimise CAPEX, production, selective mining, ore sorting - all very key variables.Punters have jumped at the sight of shadows and EOFY considerations perhaps, yet the project has been derisked with this report and we still await the imminent release of the
PFS, which is what we were all really waiting on pre 30 June anyway.As per usual new posters arrive like moths to the flame to ensure we don't lose our shirts out of the goodness of their hearts. Always have to question their motivations my mum used to say.
I am comfortable with waiting a little longer than originally anticipated to get the optimised numbers that would be presented to bankers, third parties and the like. There will be subsequent news I imagine regarding firming up resource, news re Muster Dam perhaps, third party interest in offtake agreements, progress re permitting for electricity, road and water, environmental updates, potential buy ins from corporates/high net worth individuals, as well as DFS and then Bank Feasibility, all of which derisks the project along the way. Plenty to look forward to.
Moreover, the imbalance in demand supply fundamentals in the IO space is not going to go away for many a year despite what the newspapers, analysts, self proclaimed experts and the like say. MGT has been very clear on this point. Mark Eames used to work for Ivan Glasenberg at Glencore and knows what he is doing, as do the rest of the team.
Let the pip traders do what they do as many of us have bought in much lower regardless.
I was disappointed in the sell off but it was prior to the financial year end and we still have the PFS to look forward to. Some even managed to buy in again in the low 7s - hats off to those who did, much like those who profited handsomely at 0.007 when the market misread the news.
Good things come to those that wait.
One thing is for sure, the PFS is sure to create much discussion and may surprise the market to the upside given:
- selective mining - lower MGT OPEX
- soft rock - lower MGT Opex
- Next Ore - lower MGT Opex
- potential to upgrade resource quantum - Life of Mine will not be an issue
- rail and port infrastructure already in place
- electricity will be on the grid - please note that in the Pilbara many mines generate their own electricity which impacts their OPEX - lower MGT OPEX
- once in production MGT pay down debt, scale production and drive down OPEX - as per FMG, CIA and print cash - lower MGT OPEX
- 2 corporates already onboard - surely they will be interesting in increasing their stake post PFS?
- Very capable and motivated management with plenty of skin in the game - check out Mark Eames background for instance
- Insert other key points as appropriate
Our key hurdle is to do the homework to have a solid PFS with which to generate interest to help fund this proposition, start small so as to keep CAPEX manageable and get to production.
In a low interest rate environment, high demand and price for iron ore (and yet to see impact of infrastructure spending in US etc), favourable jurisdiction we are in the right place at the right time.
Hold em tight
(20min delay)