TBs AGM Report
the BOD & DLF all there, no sign of luca or AFAF or FHFH
diesel16 ullyses & tb all there at the back.
all resolutions passed but the remuneration report got a strike 25% against ("we will take that on board")
only 710M voting, thats only 23% of all SOI, massive number of passive inactive holders here
tb attended and asked a question on the offtake & funding given the bullish BFS now issued
DLF states if there is a bid we will consider it
PH states a lot of M&A when NP goes up, mentioned Canon & OZL (ignored WSA/IGO)
"we share your frustration", blames GS DSO & covid, LOL
was called by AFAF team that they were selling POS shares as they had "another opportunity" [Noront with 350km road needed through the arctic said PH, (was that a joke AFAF, LOL!)]
Global demand will be 5MTpa of Ni by 2030!
NP will stay strong
(yet the BFS says it will go down to 10.00, which one is it?! Clearly the 10.00 figure was used to reduce the overall NP for the 4 years and thereby reduce the FCF estimates by a lot)
AFAF 3.13% BMM 11.88% Citi 2.86% have stopped selling their shares looks like
LJ an important part of the future & large project in itself. Another EA could be found, Newexco found more exciting targets there (try Abi Rose again)
BIG NEWS revealed-
indicative term sheets now received for offtake (due to the BFS issued) FINALLY
cash & credit, debt considered to be taken on, DERR
Trafigura is definitely one of these offtake tenderees PH said, MY CALL YEARS AGO
BHP mentioned OFFHAND
4 year term of offtake (PBT nowhere to be seen) as in the BFS
$50M funding keeps being mentioned, looks like this is the funding target
combination of debt & offtake cash being considered like with Trafiguras PAN deal
PAN precedent mentioned of $45M cash/credit line with Trafigura
"data room opening in a week or so" for funders/offtakers
payability wont be revealed due to confidences
Reserves of open pit being boosted
drilling at open pit starting before christmas, 5km of drilling
open pit 100m expansion, not a lot of cutback needed
open pit ore the majority of feed to mill
will mine SS first, 100Tpa ore to start [at 9% grade thats 9ktpa Ni metal on its own right?!]
rubbished the WALKUP RESTART plan, meaning he rubbished his own comment at the 2020 AGM, LOL
"seen a lot of money spent on the mill" said PH, its a well built plant with regrind stage (circuit 1)
[Finally admitted the mill is being refurbed in SECRET as I correctly called it was last year,
I also correctly called the dewatering would be started & done in SECRET also, SPOT ON, started March revealed in July Sept, completed way earlier than expected]
the 2.2MT would need a HPAL plant like from glencore at MM or FQM at ravensthorpe
an "easy development" What? not when the stalling has been so lengthy
CONCLUSION/MY THOUGHTS -
The met breakthrough has given us the ticket to production & offtake funding.
Seems to me they are getting the funding deal finalised (after 24 months of finalising it) and continue to SPEND SPEND SPEND like drunken sailors on salaries, capex, the pit & drilling.
No sense of urgency or desperation or financial conservatism shown at all.
They seem to happily keep spending, studying & preparing,
Seems they have the funding in the bag and the economics are way way bigger than the lowball BFS estimates they have put together. Its simple maths -
NP 11.60
AISC 4.90
margin 58% = 6.70 uslb thats $aud$22,300 pT margin @7500tpa = 167Mpa FCF
in the 2022 BFS they claim $83Mpa FCF ex capex opex so their estimates are half price.
Either their production figure is too high, the grade too high (LOL) or capex/opex way too low at $100M (probable).
Either way, the economics are large and its highly profitable even at lowball production, low recoveries & low payabilities.
4 years LOM to start sounds low but rememeber MCR had a 2 year LOM for 14 years!
and remember that $50M funding will be paid back in 8 months (from 1.3 years total of $100M) on their own lowball maths.
As the offtakers are now apparently wanting IN & lodged term sheets & want to see the data room despite wanting that for years now, it looks likely that the 1.1MTpa BFS will go first with mining at SS & open pit.
(20min delay)