Just my thoughts been watching the board for long time and...

Just my thoughts been watching the board for long time and finaly decided to contribute (and trying to present a balanced opinion):

Volume low: To me this seems like an illiquid stock, only around $50k has been traded in an average day, each time a small trade of a few $k share price moves 3-5%. This is a positive going up as I would think when any kind of significant volume occurs get big price surge (as we have seen last october), but if its being sold down it takes very little actual selling to push down the price. Example being the selling of a few $k on a number of occasions has pushed price down by 3% or so. I think this explains the trend to rocket up suddenly on any kind of above average volume, then drift down slowly over long periods of low volume (i.e. last few months).

Market reaction: I would say there it is not possible to gauge a reaction as only $60k or so worth of stock was traded on Fri, dont think share price movement on this basis says anything about the broader market sentiment. Maybe it implies that this result was what was expected and so did not change any opinion. What was clear is there was not huge buying.

Met results: Ambiguous, so far no proof a saleable product can be produced yet. SO far results confirm what has been known for long time (i.e its difficult to process and phosphorous is high). Not saying they are bad either as there is still potential to achieve a product sure, so not going to say it cant be done, simple fact is there is not enough data to say with certainty either way yet. Informed judgement suggests its possible, however CID deposits are not often simple to process (as we have seen). What concerned me is no actual figures were given for phosphorous content or fe grade from HIMS testing, yes grinding finer, and adding more steps like cleaning can up the grade but depends what base you are moving from at the first pass stage (which incidently was not stated...)

Previously my interpretation (hope!) was phosphorous was related to apatite in sandstone matrix which would be removed by crushing and mag separation however the announcement indicates (cryptically) some is bound to the goethite which makes it very hard to remove (but no data is given to work out how much). Maybe this is not an issue if your selling a lower quality product though so in this case it’s a non issue, but lower quality = lower selling price = lower NPV so depends on what price can be achieved for such a product vs production costs.

I have always viewed this deposit as having two different products, a high grade low phosphorous magnetite (from ooids) that can be recovered by simply crush grind and mag separation (and this is proven by davis tube test results), and low grade product from the geothite which contains high phosphorous/al, which requires more work to process (which again we see from the results). A simple and cheap process to get the magnetite is indicated to be possible from davis tube results, however the yield is low and there is little/no magnetite in the latterite so need the goethite (and therfore HIMS) to bring up the yield.

Overall I perceive the economics of the project to be favourable based on shallow nature of deposit, location and infrastructure , but on the downside is production of a high phosphorous product that requires a a very fine grain size for crushing, HIMS plant and maybe a pellet plant. Might also need a power station for all this also!

With respect to the share price I see it being driven by 3 things: 1- getting large investor intrested and getting the volumes up a bit, 2- positive met results in 4 months or so that indicate decent product grade, 3- confirmation of decent FOB cost for product (i.e $60/t max) and a the price that can be achieved from a buyer of long product to ensure margins work. I feel we have a while longer to wait for these things to fall in place so may see some more drifting down in share price for now.

So to conclude my rambling (if you got this far) in my mind it looks like you can easily get a high grade product from the magnetite but getting the goethite out will be required for the yield to be more favourable (and this is not proven to date). The economics of this will therefore come down to the cost/benefit of trying to process the goethite using HIMS, and the price that can be achieved from selling the lower grade product (which we don’t know yet.. and if we did know for sure the stock would be $1-$2 IMO and holders would have 2 or 3 boats already).