And another take on the delayed SS....From the June...

And another take on the delayed SS....

From the June quarterly...

Loosely worded so that readers might interpret that there are multiple scenarios occurring. But I maintain the (possibly contrarian) view that there was only a single "view" of the SS as at the June quarterly time. Despite the fact this comment states there is significant optionality, my take is that more definite words would have been used if CHN was suggesting a multi-optioned SS. There is no suggestion of plant size modifications down the track (although the door is left open), except for the loosely worded "strategy" which suggests there are significant "known unknowns". These are my assumptions from these bullet points in the June quarterly.






We then roll onto yesterdays announcement and this section in particular (2 underlined components) were of interest....



CHN have not spoken too much about off-take discussion (at least to my knowledge). This is a very significant trigger for a delay in the SS, IMO.

My theory is that a potential off-taker, and I am suggesting BHP will be front and centre here for this, has spoken to the board at length suggesting that the initial development scenario (singular) is not setting the bar high enough. The initial production scenario by CHN could suggest plant size of between 4-6Mtpa as a starter mine (to get through the high grade material in around 15+ years). But my thoughts are that BHP? have suggested they model a 12-18Mtpa plant so that it can be a bulk tonnage mine rather than a more niche starter mine. It still would be a multi-decade project in anyones terms which should be attractive to anyone who has the vision, and wallet, to undertake this strategy. And by starting the mine at a higher rate, any subsequent discovery add to the project life....just what the likes of BHP want.

It's a theory, but why else would there have been such a sudden, and abrupt, change of plans? Sure Plan A may well have suggested a very healthy NPV in excess of the current MC, but given the gorilla-sized nature of the deposit, taking a staged approach could be viewed as selling the project short, and not really embracing the scale which this project could, and should, be initially started at.

Potential offtakers here in Australia could be BHP, Twiggy or even WDS for the various products the project would spin out. These are all gorillas in their own right, with gorilla appetites. BHP might want the Nickel to fill its Nickel Sulphate plant, Twiggy and WDS eyeing off PGM's for hydrogen. Whatever the combination, CHN would be courting a troop of gorillas behind the scenes.

And this is a very positive comment regarding a Project Director, taken from the Institutional Cap Raise presentation on 24/5, but hasn't appeared on subsequent presentations.




And looking at today's price action as a result of UBS coming in and shorting the fk out of CHN, despite the pain of this price reduction, I am more of the opinion that interest from significant others is further down the path than the terminology used to date is letting on.

All things considered, I feel that right sizing the SS is a better outcome than producing a SS which is underdone. So whoever convinced the BOD to change its stance here, has done the right thing on behalf of CHN. CHN BOD do not necessarily have the experience with Tier 1 mine development (possible exception is Stephen McIntosh) the likes of which BHP, FMG and WDS have in their DNA.

There is now time up the shorter's sleeve to squeeze any loose shares from holders grasp. We've been put back 3 months minimum, but the outcome could well be better...if you know what I mean.