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9.4¢ carpentaria resources ltd

Thanks for your work Tran,I was talking to Quentin Hill late...

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f100keptin

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116

26/06/21

20:37

Post #: 54094845
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Originally posted by Tran: ↑

HAWSONS IRON PROJECTS KEY FACTS AND FIGURES:
- Total resource = 2.5 billion metric tons of ore at 17% head-grade = 348 million tons of 70%Fe fines concentrate.
- Total product = 201mt of 70%Fe based on 1.423 billion metric tons of the total resource.
- Annual production = 10mil tons of Fe70% fines concentrates. The highest iron ore concentrate grade in the world.
- Hawsons Iron Project will create approximately 1200 jobs in construction and 500 jobs in production operation.
- Awarded "MAJOR PROJECT STATUS" from the Australian Federal Government.
- Awarded "Significant State Development" status by NSW government.
- World's well-known and reputable mining consultant Wood Markenzie ranked Hawsons project as "the best undeveloped iron ore project in the world".- "Hawsons is located just 60 kilometres south-west of the Silver City, providing access to established rail, road, port and power infrastructure in a region with a long and proud mining history and a city with generations of skilled mining workers."
- BFS is scheduled to commence in Q3 2021 (imminent) with expected resource upgrade and pilot plant as part of the study.

Let's take a closer look at the NPV from the 2017 PFS:- Resource utilization: as part of the PFS carried out in 2016-2017, the company did an in-fill drilling round to upgrade part of its inferred resources to indicated resources. Inferred resources are typically 200m drill-holes apart and Indicated resources are typically 50m drill-holes apart. It was a spectacular successful in-fill drilling program with 96% of the section where it drilled during that campaign was upgraded to Indicated Resource Category. It would have been 100% conversion if the cut-off grade for DTR was lower than 9.5%. (Refer to the section Resource/Reserve on the 1st image above)

- Current resources are 121mil tons of concentrate in Indicated category and 227mil tons in Inferred category. There will be a resource upgrade in the upcoming BFS and i do not see any reason of not repeating the same level of conversion from the remaining 227mil tons to all JORC Indicated Category resource. We will look at NPV in a few different scenarios of 250mil tons, 275mil tons and 300mil tons from the current 201mil tons without resource upgrade coming up.

- There will be extensional drillings (drillings outside the defined area) as well i believe as most of mining companies always do, to increase their whole resource quantity given the extremely high conversion rate of 96% (could well be 100 if cut-off grade of DTR is lower than 9.5%).

- Discount rate: refers to the time-value of money. This discount rate is the AVERAGE discount rate. It includes the impact of loan interest and inflation rate, worked out to be the average rate over the life-of-mine (20 years) of this Hawsons Iron Project. In the original PFS, it was assumed that bank loan will be paid off completely in 10.5 years. However, as the IO product prices have increased so much, with so much profit to be made, the total loan package for CAPEX could easily be reduced to a few years and thus would have a very major positive impact on NPV. And i mean it is very very significant positive impact on NPV of Hawsons project.

Almost all mining projects in the world nowadays utilizes a discount rate of 8%. You can hardly find any one that uses 10% at all. So, i will apply an 8% discount.

- From the above table of the key metrics of the PFS, you can see:

> NPV₁₀ = usd $867mil, NPV8 = usd $1bil, when Fe65% = usd $75/ton (corresponding with Fe62% = usd $63 and Fe70% = usd $88/ton)
> Annual production = 10mil tons
> Average annual All-in-costs = usd $480mil = usd $48/ton

And
> NPV₁₀ = usd $1.432bil, NPV8 = usd $1.651bil, when Fe65% = usd $85.40/ton
> Average annual All-in-costs = usd $486mil = usd $48.60/ton

(You can convert NPV10 to NPV8 by going to google NPV calculator and enter numbers by trial and error until you have exactly the right figure for NPV of $867mil with discount rate of 10%, and then change discount rate to 8%, then press CALCULATE button, then it converts to the NPV8 for you. Do the same process for NPV10 of $1.432bil, then convert to NPV8).

So, what we can see is: for each USD $10.40 ($85.40 - $75) increase in the price of Fe65%, NPV8 increases by USD $651mil and total annual All-in-costs increase by USD $6mil or USD $0.60/ton.

> At current IO prices, Fe65% = USD $250/ton and at conservative 250 mil tons resource utilization.
NPV8 = [$1.651bil + ($250-$85)/10.40*$651mil]*(250/201) = USD $14.9bil = AUD $19.9bil with
All-in-costs = USD $57.5/ton.

> More recently, there are more forcasts that Fe62% will be sustained at long term price of USD$150/ton (corresponding to Fe65% of around $180-$185/ton). If Fe62% stabilizes to sustained long term price of USD $120/ton (corresponding with Fe65% = about USD $150/ton)
NPV8 = [$1.651bil + ($180-$85)/10.40*651]*(250/201] = USD $7.6bil = AUD $10.1bil
All-in-costs = USD $53.50/ton

> If Fe62% stabilizes to sustained long term price of USD $120/ton (corresponding with Fe65% = about USD $150/ton)
NPV8 = [ $1.651bil + (150-85)/10.40*$651mil]*(250/201) = USD $5.72bil = AUD $7.6bil.
All-in-costs = USD $52/ton.

Many mining stocks has MC = 10%-15% of NPV after PFS and MC = 20%-30% after BFS.
CAP has MC = less than 1% of its NPV.

My short term target MC = $200mil - $250mil (now)
Mid-term target MC = $500mil after announcement of off-take agreement.
Longer term MC = $3bil (after commencement of production)

Mitsui makes $86m deal with Carpentaria on Hawsons iron project
August 8, 2018NewsEwen Hosie
Latest NewsFirst Karlawinda gold pour imminent for Capricorn Red River, Glencore sign Hillgrove offtake agreement Pilbara Minerals to accelerate production with Ngungaju restart Bravus breaks first coal milestone at Carmichael
Japanese trading house Mitsui has made an $86 million deal with Carpentaria Resources over the Hawsons iron project southwest of Broken Hill, New South Wales.
In return for a 2Mt/y option on Carpentaria’s high-quality Hawsons Supergrade product, Mitsui will contribute around 20 per cent ($5.4 million) of the project’s bankable feasibility study (BFS) cost and $81 million towards debt funding for construction of a new magnetite mine.
The Hawsons project is a joint venture (JV) between Carpentaria, which owns 68.7 per cent, and Pure Metals, which owns 31.3 per cent. The companies are aiming for 10Mt/y of iron ore production from the project, which has sent a mining lease application to the NSW Government. The BFS is one of the final stages before full production and is expected to be completed within the next 12–15 months.
In April, the project securedMajor Project Statusfrom the Australian Government, becoming one of 13 projects in the country to do so. The project is expected to create around 1200 construction jobs in the region and a further 500 jobs over its 20-year mine life, according to a statement from Senator Michaelia Cash, Minister for Jobs and Innovation, Western Australia (also from April).
Carpentaria managing director Quentin Hill said, “Mitsui’s record speaks for itself as one of the largest and most astute international investors in Australia’s resources industry.
“This investment validates the quality of the Hawsons Supergrade product and its ability to satisfy the demanding needs of customers in the high-value, high-growth iron ore markets of direct reduction iron and pellet feed.”

Expand

Thanks for your work Tran,
I was talking to Quentin Hill late Jan??--it was when when they were calling shareholders regarding the proposed board changes etc and he was very upbeat then.
Obviously he couldn't/wouldn't talk insider specifics to me, but I formed the distinct impression that there was a lot that was positive going on behind the scenes and I thought that they(directors) probably had good "skin in the game" as well (I stress-my opinion only) .

He did allude as you have on so many occasions that the SP didn't really reflect the actual value at that time , but as usual the market was making its own mind up about that.

Based on my impressions of his enthusiasm for the project and other general comments of interest ,I later backed the truck up again and am now sitting in a dump truckload at 4.2 average (started 2 years ago) --couldn't be happier now lol--not my usual MO buy+hold with little caps but this cap (ho ho) is an exception I'm loving......

He has moved on now but I don't think he,ll be too far away for some reason....
Cheers

CAP Price at posting: 16.0¢ Sentiment: Hold Disclosure: Held
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