Just in reply to a comment you made sometime ago on another thread. I thought it was appropriate to start a new thread since I am wanting to discuss Dingo West.
"Yeah I did for the meantime Val as I put alot of my holdings into cash...the bit of fear set in with the world markets so up and down.
I have a small holding in BND now and will look to re-enter the other explorer at a later date. I just couldnt overlook BND any longer for its cash holding, WICET stage 1 allocation, rail agreement with QRN and its short term production out of dingo west. I jumped on board when they announced the new CEO appointment and I thought that with his experience he would not have signed on unless he thought BND had a very bright future. Not to mention its a prime takeover target for its port allocations alone at this level.
I sit back and watch the other explorer increase its resource levels nearly daily but I dont think it will really move until it secures a partner and some concrete transportation solutions."
Ok, so I am just questioning a particular comment you have made in the above post (underlined). According to my calculations BND currently has as at 31 December approximately $125 million in the bank. I believe Bandanna are continuing to explore and pay administration expenses throughout out 2012 and I can't see how they will have enough cash to develop a 1mtpa open-cut operation at Dingo West without raising further capital and/or getting a JV partner. So I ask, would it be worthwhile to a JV partner coming into Dingo West for a share of 1mtpa with no indication and (possibly capability) of expansion?
I am of the understanding that Bandanna have a relatively immediate commitment (within next 6 months) of approximately $67 million to port (WICET) and rail (QRN) development. So with admin costs this year of approximately $10 million, that leaves Bandanna with approximately $48 million by the end of 2012 assuming no further Exploration and Evaluation (which is not possible). I also note that plans to develop a 1mtpa open cut operation in 2013 are based on an inferred resource of 91 million tonnes. No doubt further resource definition is expected any day now.
As to Springsure and Arcturus we know that it will cost upwards of $1 billion to develop. That's another story. Perhaps we could discuss it on another thread, another time.
Back to Dingo West, my conclusion is that Bandanna needs to sell one or more projects (most likely Galilee project) during 2012 relatively quickly to develop Dingo West, find a JV partner that will fund 100% (highly unlikely but you never know) of Dingo West or raise further funds via another placement.
The capital cost to develop Dingo West is in the order of over $135 million. Therefore I anticipate Bandanna's cash balance by end of 2012 to be $48 million less any "Exploration and Evaluation costs" for the year if there is no capital raising. So given their indicative timetable to produce in 2013, time is of the essence with regard to the development of the mine is it not?
I anticipate that it will take at least 1 year to construct the mine at Dingo West. Even if they find a JV partner for Dingo West it seems they will somehow need to find more funds to contribute their share of the mine development.
Your thoughts about Dingo West? Anyone's thoughts?
BND Price at posting:
62.0¢ Sentiment: None Disclosure: Not Held
