I am reluctant to make forecasts because I am often wrong.
But... LOL
- Almost 200Mt of very high grade iron ore (DRI quality) for drilling conducted on about 35% of the strike length at Bekisopa
I honestly thought we would have hit at least $0.50cps when we announced the maiden resource, but perhaps this didn't happen as there were delays and the maiden resource was delivered in 2 parts over the course of a month.
At the time of announcement for the maiden resource, our share price was double what it is today, which was a market cap of about $25m
Positive studies should return very compelling commercials for DSO, as well as give some insight to DRI potential.
The key factors are:
- DSO resource size and grade (I think it will be 4mt at +65% grade. We should have details from the infill drilling in H1 2023, or 3 - 5 months)
- Start up costs (I think about $150m - $200m)
- Operational costs (should be extremely low - I think as low as $5 - $10 per tonne for DSO)
- Mining operations 2Mt per year using similar numbers as above will mean
---- $135USD/t sale price
---- $50USD/t FOB costs
---- $85USD/t profit
---- 2Mt X $85USD/t = $170m USD, or $265m AUD, in "profit"
- 19X our current share price- Transport costs (road, port and shipping) - see below
- Energy (could result is significant capex depending on how they want to do it, will it be all diesel or mix of renewables from the start?)
- Environmental considerations should be minimal due to the landscape and the minimal use of water
- Shares on issues (currently 78m)
I think the biggest question will be around the transport.
We will know the route, and have a high level understanding of the costs, but road transport will likely be outsourced to a transport partner who will likely charge us a per tonne fee. I doubt we will have a firm quote for this, just an estimate.
I did some estimates previously, and I think the round trip will take about 12 - 14 hours, or almost 2 trips per day per truck.
https://hotcopper.com.au/threads/good-volume-yesterday.6441209/page-32?post_id=58774432Given all of this, and because of country risk, and the fact we do not yet have a mining license and the fact we will need to raise funds to go mining, I think the share price might go up to $0.40c, or as high as $0.75c
This would mean a market cap of around $30m - $50m.
Once we get a mining license, then it becomes an issue of raising money.
Given the expected commercials a mining license could push the share price up over $1, which would be good because if we raise $200m @ $1 per share, we will have about 300m shares on issue by the time we go mining.
300m shares with earnings per share (EPS) of nearly $1 (given $265m AUD "profit") will be massive, and depending on the dividend policy of the company we could have a healthy DPS, and that will rocket the share price.
There should also be minimal to no dilution for the expansion works once we go DSO mining and start making money.
(20min delay)