There is lots to like: Excellent management and credible financial backers etc.. great jurisdiction for Africa, existing railway and port, mid to high grade product, low capex and short timeframe to initial production.
My concern though is this:
Inevitable high cost to deliver product to end user ie. China. Getting ore from deep within African jungle to port then transhipped to capesize then from Atlantic to China can never compete with most Aussie miners C1 costs and lower capesize shipping costs.
Genmins necessary advantage over the Aussie mines is ofcourse their 62-65% product attracting a premium. CIA's success in Canada greatly assisted by the premium they get for a 66% Fe product.
So, GEN at US$59/t Fob plus US$20/t shipping based on long term C3 Capesize rate Brazil to China puts GEN total CFR China at around US$79/t. This okay if 62% Fe at US$85/t with GEN viu premium lifting their product to US$99/t received. Gross profit then $20/t which certainly makes Banaika viable. IO currently higher than this approx US$95/t 62% fe last time I looked.
But as always its the future uncertainty of the volatile IO price that is the biggest risk. China economy, CCP policy and geopolitics generally, unpredictable going forward.
GEN progressing nicely though.
GEN Price at posting:
22.5¢ Sentiment: None Disclosure: Not Held
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