Ann: West Arunta Project - Luni MRE, page-213

I appeared to call a top if you don't mind, not when it was going down. Then it went down, hard, then it went up on good met, hard, now the MRE dropped it went nowhere... as expected. Agree with Argo's that the lack of MRE detail was disappointing given the multiple geological domains modelled and estimated. Still, end of the day it's a big blob of variously supergene enriched niobium mineralisation that everybody saw includes a lot of thick and high grade ore. Big enough for a good for many years of 2.5% Nb2O5 between 1-2Mtpa as Argos suggest, which everyone already knew yesterday..


The geology interp was a good read, very typical zoned carb in large scale, very complicated multiple intrusions, dikes, hydrothermal events in small scale. Salpetie already made a good post on the geology. I'm more interested in the question valuation than stage 1 Inferred MRE. Will WA1 go down the Lassonde Curve over the study/permitting period, or will M&A give holders a continued armchair ride towards even more riches? Just listened to the MoM boys and their two shareholder guests blow wind up each other's WA1 stuffed clackers, speculating over who will end up marrying our blushing bachelorette...

I get the strategic premium value of a world class assets, but find myself still tethered in the pre-Silicon Valley of price-to-earnings and other bothersome return on investment metrics. WA1 has a MC of A$1.2B today (undiluted) and punters talking how much higher the share price needs to be for M&A to be acceptable. No doubt all Aussie large cap miners would be interested in Luni, not at 'any price' imo. Not before a NT deal is done (and I'm on record saying I don't think the NTs are in a rush to lock in any deal) and not before ENR do enough drilling to see what other Nb carbs are crowding the neighbourhood.

Then they will need to consider if they want to be in a very small commodity market, controlled by one giant producer who is desperately trying to stoke demand through battery research and the like to be able to lift sales. CBMM are sitting on a newly expanded 150ktpa ferroniobium plant, when global demand is 125ktpa (2023). Luni at 1.5Mtpa @ 2.5% Nb2O5 and 55% recovery would produce 20ktpa Nb2O5, or 32ktpa of ferroniobium @ 65% Nb2O5... which is a very chunky 25% of new global supply needing to find a home. Imagine ENR finds Luni-Mk2 next door and also needs to produce 32ktpa ferroniobium to make bank and justify a $1.2B MC etc, then two new mines would fill 50% of current demand and push CBMM into a 50% drop in production when they are looking to expand not shrink...

Getting into what-if land now, suffice to say I see risk where others only see upside. Take the MoM guest bogan-geo getting chubby over Ti-REE biproduct credits once the met is wrapped around the potential. Odds are very, very low the met would ever work for TiO2, and the price is so low transport to port would kill it if you could float it. REE... slightly better chance, just very low odds imho.

All very interesting though, GLTAH