careful of what is posted in here

To many "experts" on the forum that punters shouldn't be listening to. Posters in here are grossly misrepresenting the agreement between SFR and VRX, either because they haven't a clue what they are reading, or its intentional.

I've read in here VRX will only get $3mil cash, not quite right. $3mil upfront cash and SFR are paying $6mil towards future drilling and study costs. Thats $6mil VRX would have eventually had to spend anyway.

Also read how VRX's share of the resource is only now worth 1-2 cents. Ridiculous. Do the maths ....

142000 tons = 313,056,412 lbs.
313,056,412 x .2(VRX percentage) = 62,611,282 lbs.
62,611,282 x $3.45(copper price,aud) = $216milaud.
$216mil x .51($1.70(C1)/$3.45) = $110mil(aud) net value(VRX net share of the deposit).
$27mil(VRX cap)/37c(VRX share price) = $730 000 per share.
So according to Richierich the market will value VRX's 20% share of the deposit at $730k-$1.4k??

Also keeping in mind the resource is open at depth and its getting richer as it gets deeper. Wheres the bottom? VRX net proceeds is already $110mil, which equates to around $10mil net profit a year for next 10 years mining at 500k PA. Imagine the estimate reaching a further 30-50%. Then the market cap would indeed be much more undervalued.

Richierich again ....

"SFR paying $9m for 80% share of the project, therefore VRX's 20% share of the project is valued at $2,250,000"

Another ridiculous comment, $9mil is basically a deposit. Wheres all the milling infrastructure already established and tolling costs, for starters, valued into the project or deal if you want to calculate it like that. Who values projects or farm in deals like that anyway?? Then hes pro rata'd the $9mil into the VRX share price!!! A share price is valued on assets and earnings, not a deposit. Please!!

This is a good deal considering VRX where on the ropes. Now they can go straight into production with no capex outlay, meaning no significant dilution or the dangerous inherent risks debt brings with it. This deal means straight past the financing, construction, commissioning and straight into cash-flow.

I have no doubt this will open lower, probably much lower taking into account they will have to do a capital raising to cover costs until production. There is also no date set for production and this will spook the market. However logically thinking its probable they will mine sooner than later. Thundana's oxide ore is exceptionally low impurity and leaches better that Degrussa's, so to improve SFRs milling and keep the recovery level up it would be best to blend the 2 ores. SFR also haven't hedged for bottle necking in their underground operations, they are going to be running full steam to reach the productivity quota already advised to the market, so running underground operations to that extreme would be very risky without a second source of ore if underground operations at Degrussa should happen to be out of action for a period of time. A smart operator would hedge from a second source.

Yes VRX have lost 80% of the deposit but thats not what should be focused on. They are also significantly derisked by no $70mil capex, which is doubtful they would have raised anyway and no debt which was wiped out by the $3mil. $6mil worth of drilling and studies is fully funded. We have a rich, low impurity deposit which is open at depth and eventually we will see $200k of net profit filling the coffers.

Just brace for an initial share price fall(speculative) and exercise patience. Depending on if and how far the price falls it may present an outstanding buying opportunity.