the following may help (between $10 and $20 per tonne)
Creasy-backed CZR Resources flags major Rio Tinto takeover potential after red-hot Robe Mesa DFSDaniel Newell and Adrian RausoThe West AustralianTue, 10 October 2023 2:01PMCommentsCZR says the numbers for Robe Mesa stack up as a standalone project, even without interest from neighbour Rio Tinto. Credit: Rio Tinto/TheWestThe boss of Mark Creasy-backed CZR Resources believes the junior miner being in Rio Tinto’s sights would make “great sense”, following a feasibility study on a Pilbara project that delivered a share price surge.CZR Resources on Tuesday released a definitive feasibility study of its promising Robe Mesa iron ore project which revealed a forecast internal rate of return of 62 per cent based on an iron ore price of $US90 a tonne.The DFS said the project was targeting production costs of $49/t, with expected earnings before interest, tax, depreciation and amortisation of $824 million over an initial eight-year mine life.CZR’s shares were up 29.6 per cent to 17.5¢ at 10.45am after hitting an earlier intraday high of 18¢.Managing director Stefan Murphy said there was further value to be unlocked if the Robe Mesa project was combined with Rio Tinto’s Mesa F deposit.SUCCESSION PLANLynas Rare Earths chair calls time after 12 years on boardDaniel NewellIRON-CLAD DEMANDTrott confident on Asia demand amid jump in cheaper oreAdrian Rauso“The two deposits share a common boundary and orebody, there are huge amounts of synergy to be had,” Mr Murphy told The West Australian.“We could probably deliver another $30 per tonne in savings if we put our ore on Rio’s rail network and port infrastructure.”Mr Murphy said that even if a deal does not materialise, the DFS highlighted that Robe Mesa has the fundamentals to deliver exceptional financial returns as a standalone project.“Our DFS has a conservative base case, the internal rate of return rises to 159 per cent at current iron ore prices that remain very strong at about $US120/t.”Stefan Murphy is the managing director of CZR Resources. Credit: SuppliedMr Murphy believes commentary surrounding the adverse effect of China’s weak property sector on iron prices has been exaggerated, sentiment which was echoed by global investment bank UBS in its latest iron ore projections.UBS lifted its long-term iron ore price forecast to $US85/t from $US65/t on the back of a strong outlook for the manufacturing and infrastructure sectors across China, India and South East Asia.“Approximately 90 per cent of global steel demand and ~87 per cent of seaborne iron ore demand won’t be driven by China residential property construction from 2025,” UBS stated.CZR’s DFS also increased ore reserves and total production at Robe Mesa from 27.3 million tonnes to 33.4mt, with first output of 3.5mt a year ramping up after the first four years to 5mtpa.It said the project would turn out ore with similar specifications to Rio Tinto’s Robe River fines and other Pilbara fines products, such as Fortescue Metals Group’s super special fines and blended fines.CONFIDENCE BOOSTBCI secures final funding for $981m Mardie salt projectAdrian Rauso‘REAL CLARITY AND DIALOGUE’Japan deserves clarity on Australian policy, says BHP bossJordan MurrayThe company is in advanced talk on offtake deals and was now working to secure the debt and equity finance required to fund the project’s development, with a final investment decision due in the second quarter of 2024.Pilbara Ports Authority has also agreed for the Port of Ashburton Consortium — a joint venture by transhippers CSL Australia and Strike Resources — to submit an application to develop an export facility at Onslow.CZR has an 85 per cent interest in Robe Mesa through the Yarraloola joint venture with Mark Creasy’s Yandal portfolio, which holds 45 per cent of CZR stock.
CZR Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
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