A new member. Trying to get the total picture right in my head before I potentially buy some of this stock.
Positives -known ore reserves with low impurities on an extension of a resource with proven results (yampi member) -native title agreement in place (which is why I assume Cliffs opted out of full ownership/own development as it was all too hard) -environmental issues dont appear to be significant (but still a risk)
Negatives -Capx PFS $700MM less $190 possible savings =$510MM vs early estimate of $350MM. Up $160MM (45%). Increase in line with other projects due to WA boom? -Opex total $73/MT on stage 1 only vs early estimate of $37/MT on ship (not sure if early estimate included beneficiation in Asia?). Up 100%. -delayed startup. More chance of IO price falling?
To be determined -resource size. Stage 1: 48.4MM MT at 67% FE vs earlier full estimate target of 108MT at >66% FE (low impurities) but PFS released before all drilling results were in. Key issue here is how large will the resource become once all drilling results are in and at what fe%?
Current market sentiment -share price down from 78c to 26c (down 67%)! Have major shareholders sold? Dont think so, given no announcements to that effect.
Future? -finalisation of actual reserves with completion of additional drilling holes? -get JTC agreement on board or other party? -can mngmt speed up time to market (refocus on DSO to get income flowing at higher prices)? -if no agreement, sell the resource to the highest bidder (Cliffs or Mt Gibson on adjacent islands?) Will a potential buyer pay more than current market cap of PLV for this resource ($35MM)?
PLV Price at posting:
22.1¢ Sentiment: None Disclosure: Not Held
