Just to build on this... Looks to me like a fairly clear delay...

Just to build on this...

Looks to me like a fairly clear delay on the lab side of things considering when they suggested they were moving the MRE upgrades. Has probably moved the goalposts for the FS back 6-10 weeks which was previously Q1 completion as I recall.
This to me read that SS/FS and met test work will more likely formulate for completion in Q2.

Agree that they will raise likely funds between now and the study release in Q2. I garner using the upcoming news to ideally get the S/P a little higher before doing so. I'll participate if able - will be averaging up. Timing will be close to end of year my guess - or earlier if the market starts to valuate the project a little fairer.

Post #:55505918 has the economics i'm assuming.

"I decided to muck around with some tonnages and throughput figures just to have a pre-populated look at where I think the SS might land.

Obviously there are so many variables in a SS and the NPV so I can't display every possible variant. I've detailed some assumptions and inputs which are fixed and simply looked at how the tonnage from the MRE impacts LoM and therefore the NPV.

So a few caveats: The input of the resource are assume to be as below.
6.2% Grade (which would be around 5% cutoff) and the ilmenite/rutile/zircon all remain similar.
80% recoveries are assumed (noting we achieved 71% in the first and only test
pricing of elements is as per below.
USD/AUD at 1.4
Rutile revenue set to 0 and using this as an input in the ilmenite to get it from 47% to 50%.
AISC is assumed to be half the revenue. = $3.6/$3.8 (i've done this for simplicity but think it will be higher, noting that i also think revenue will be higher than $220usd so i'm happy to balance those out.)


Discount rate of 8% is used
Full production from Y1
Capex increases for throughput (really just thumbsucking capex numbers)
All figures in AUD below.



So what the hell does this all tell us. Well for me I wanted to see what the low end of the NPV would be if we obtained a low overall tonnage. I guess it's worth remembering we already have 1.4bt of resource. At the 5% cutoff we're up to 500mT on KM. So all i'm presenting is what the NPV would look like potentially at say 200mT.

but important to recall that revenues/profits shown above for 200mT are for a 6.2% resource. If we wanted 200mT tomorrow at KM we can used a 6.2% cutoff which yields 7.5% THM. which is obviously higher than the 6.2% i'm basing revenues off above.

I think MRQ might go around 6-6.5% cutoff. That gives the straight up 200mT at KM.
Then it's a case of how much we get from the other 2 deposits.

I developed this such that once the MRE drops i can quickly do some calculations to understand implications. You can see that if we were to drop a 300mT resource then even at 6.2% THM the profits and NPV is quite good.

Anyways I think tpa will be maybe 15-17.5mtpa and I think our initial ultra high grade MRE will be targeting maybe 250mT-300mT or so. That would be an NPV around 315m-370m AUD.

Note well, there are lots of variables which can skew these NPV's much higher and much lower so please treat this as a indicative of how much the NPV changes for the LoM and the throughput.

You can easily drop this NPV a lot by bumping the capex up a touch, use 10% discount rate, decrease ilmenite price, use 70% recoveries, assume a higher AISC. The same is the case on the counter.

Irrespectively, I think there's reasonable justification for some upside in my assumptions and also justification on the downside. The SS takes a team months to complete and even then you can edit something like the LoM pricing and the discount rate and it has very large implications to the final number.

What the above back of napkin calc has shown myself is that even if I paint a very dire picture there is still quite decent upside here. Ultimately economics will need to come from the SS itself but the MRE upgrades will allow me to at least firm up a few figures in the assumptions. Namely the THM content which helps to drive revenues. The AISC/Capex will be best guesses whilst the revenues can be fairly easily obtained LoM pricing from reputable analysts.

Looking forward to the MRE's remembering it's all about how high we can get our THM grade. Any tonnage over 200-250mT gives quite an acceptable LoM and NPV."

Can firm these numbers up as the MRE figures start rolling in. But irrespective it will be an NPV exceeding 200M npv with my target set around 300M or so. Less than 10% of your NPV is generally my money shot for early stage projects where i typically suggest 10-20% as "fair value" or what "market value" typically places on it. Meaning 2-3 times upside if that's accurate. Which was additionally what I had stated was my price target post SS. Around 40-50M MC which is reasonable for a project with 300M NPV. We will need to see what the MRE is and then secondly the SS but i see very good opportunities.

Left field stuff is the new tenement application and of course linhuane both of which can add more value which i have not attributed.

SF2TH