traydor, i think its, er, safe to say it is a huge area. That is not an issue.
There is an awful lot of Nickel down there.
It's just a shame that it's not particularly easy to get out of the ground, and not of a high grade.
However, as long as Nickel increases by, say, 5%.. ON AVERAGE over the life of the mines (32 years for their big one, as a prelim estimate)... we are quite good :)
Note, that is 5% from TODAYS price! Not, 5% per year... just, literally, has to hold 5% above todays price. (well, 24th Decembers price, that's the latest I have).
If Nickel averages, over the next 32 years, 16% above its 24th Dec price, (to $9.81)... from just Yerilla we should have a NPV of circa $530+m (pre-tax discount rate of 8%).
Add in the rest of their projects, and assume KNP and A1 are viable... and you have quite a nifty company.
Just for kicks, if Nickel can average 30% higher than 24th Decembers price, over the next 32 years, it'll be $11/pound... For Yerilla, this, pessimistically, will result in a NPV of circa $1Bn.
$1Bn spread over 260M shareholders = $4 each, from Yerilla alone... Again, with a pre-tax discount rate of 8%.
These numbers aren't far fetched... two requirements would be needed: The PFS to be accurate enough (risky, but, no evidence tot he contrary) Nickel to increase in price at around 1% per year for 32 years.... (not without risk, but, this is less than historical inflation).
$9=$218M NPV. $11=$1Bn NPV. How much would $13 per pound be? Enough to give make HRR a very valuable company in a few years time... and make me smile an awful lot.
Will Ni keep rising? Hmmm, depends. It's a fairly green metal, in a lot of ways.
It's used in nuclear plants a lot... It's used to make a lot of rechargeable batteries (electric car batteries inclusive)... It's used to make things like planes lighter...
HRR Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
