RIO only drilled a few holes into TB but were on the way out of min sands at the time so didn;t push through. Some of it is deep, it is fine grained, it does have a lot of iron-oxide trash, it is some distance from the coast. SFX drilled it out and turns out to be very large, the overburden not that bad, the products good quality (after LTR roasting of the Ilmenite), and bottom line is after years of studies and costings from independent consultants, financiers and engineering companies that signed up.... it makes a lot of money if it can get funded. More money if TiO2 unit prices go up, less if zircon prices go down.
It's not about that big companies have walked away from projects before meaning they're no good. It's simply about how good that project is in today's market that the majors walked from in some previous market. Despite high trash levels, TB has a high value assemblage (Zr & Ilm) which at 11% THM average grade for it's +1B tonnes covers a lot of costs. Multiple DFS documents confirm that all these extra costs TB has to bare still mean a very high operating margin and post tax NPV8% of ~$1B AUD. That is not opinion or conjecture, that is what comes out of years of work, and years of permitting such that it is now shovel ready.
MRQ waded back into Corridor South as an exploration company, but unfortunately found the modest grades (ie ~6% THM form surface at best for large tonnages) and low value assemblage the region was known for and walked away from previously. The recoverable revenue per tonne for KM, Nhactuse (very similar quality) imo just looks way too low to be high enough margin to attract funding, let alone another corporate buyer in this or any near future market. Sometimes majors walk away from projects that turn out better and valuable in the future, sometimes they were spot on to walk away and it doesn;t get any better in the future.
I agree MRQ is priced as a cheap exploration company, because that is all they are. IMO the market assigns virtually no value to Corridor South, but they have ascribed value to the exploration potential of Linhunae just in case those RIO drilling records are real. Trouble with these large, low-value ore deposits in Africa like Corridor is they are all or nothing. It's unlikley anyone will want to invest in a cheaper, small, poor economies of scale mine in Moz because, even if it made some money, you take on large Africa risk for not much return. That's an all or nothing bet when the all is not very much....
The only way to go small in this part of the world for western investors is if the grade/assemblage makes small a very high margin proposition. This is how Kwale went, even though they had all sorts of sovereign risk troouble early years a to prove my point . However, Kwales first 3-4 years were on approx US$25/t recovered in ground value ore, from surface as we expect. Even if MRQ can find 100Mt at 7.5% THM like Kwale, the assemblage at Corridor is so low value it would represent maybe $6.50/t recoverable. That is simply a different ball park... the very low value ore at Corridor needs huge economies of scale not small ones.
Exploration needs to pull a rabbit out of the hat with much higher grades and better assemblage to prevent the modest 'exploration premium' in the stocks MC from disappearing and leaving only the shell behind. No surprise, that's always been my stance.
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