cawse prospektor

Prospektor

I do not think TNG will need to spend any money on Cawse. TNG has a 20% full free carry to production or 2% Net Smelter Return. Norilsk has indicated its intention to open two new pits on the Cawse Extended tenements before the end of 2008 (refer Hardman report). Recent media suggest Norislk is getting very serious about its recently acquired WA nickel interests.

At current nickel and cobalt prices, TNG's 20% interest in the JORC compliant (!!!!) 97mt ( !!!) resource is worth $4.1b (in ground value).

I have a mate who is pretty cluey on this stuff, and he thinks TNG's interest in this project could well be worth the entire current market cap of TNG. That is, Cawse is worth say $100m to TNG, or 2.5% of in ground value. ( Hardman's assessment of the Cawse project, seems to be a valuation of $64m for TNG without any value for the cobalt )

You will note that TNG has already indicated its intention to divest itself via shareholder distributions of its non Manbarrum assets. The WDR distribution which happened last week is a pre-cursor to some very valuable future events, in my humble opinion. I am very comfortable holding TNG in that case. I figure the underlying value is there.

I do not think Cawse extended is the only valuable asset (apart from Manbarrum) in the TNG fold. The strong relationship with the NT Government (refer media release last week re the granting of the 1000th mining lease to TNG by the NT Government) could prove very valuable in time....just my take on all this.

This week should be pretty interesting. I presume we will get a drilling update of some consequence, given the seminars in Brisbane and the Gold Coast.