Ok beautiful people, I'm sure most of you have heard of RLC's jump in share price today. Just to clarify, I'm not cross-promoting here, I'm just pointing out the potential we have for our Perenjori Iron Ore project. Congrats to those holding RLC, it was a company that I wanted to buy into but missed the schedule I guess. I actually think they will do very well now that they have an agreement to pursue the HIsmelt Technology. Pig Iron could fetch US$290 to US$410per tonne at a time when Iron ore was $60-$120 per tonne. I will explain as we go. MGT is another magnetite mining co using another technology to enhance quality and improve recoveries. It seems that the magnetite producers/miners are now looking at ways to improve the economics of their projects which in some cases would Not have been viable otherwise. Just for the record our SS shows we are economical using conventional processes.
I will just present the facts and point out the similarities and differences. Kinda like a peer comparison, if we can call it that. I think we have a better resource but I will show that in the post.
I have taken on board good friends' advice to keep my posts short and simple. I will endeavor to do that as I know I usually get carried away with detail. So I will post the summary to start and the conclusion at the end for those who just want the gist. I promise to cut it down dramatically.
SUMMARY
Background on RLC
Benefits of HIsmelt Technology; Pig Iron price is very high. Pig Iron could fetch US$290 to US$410per tonne at a time when Iron ore was $60-$120 per tonne.
SRN's PERENJORI IRON ORE PROJECT I have posted before about the project including the x-BHP tenement(VMS target ie base metal mineralization) and Feral's Find on this thread. Please refer back. Post #:49617413,on a side note, check Gutha Prospect's Geochemical and Geophysics confirming VMS mineralization, amazing stuff SRN is Economically viable according to Scoping Study but with HIsmelt Technology could command a high Pig Iron price. A coarse grind is required which we do have. See below snippet
SRN's Inferred Resource 191mt at 36.5% Fe with limited drilling not taking into account x-BHP tenements, adjoining tenements and identified Bestry BIF zone 80m thick and 2.8 km long. Furthermore, here is another report showing 'course grind' 191mt resource not including Bestry BIF zone. Below will show you that our current resource was defined up to 175m when we know it goes down 300m. Also, a study by CSA Global has previously estimated an Exploration Target of 320 – 360Mt at 32-37%Fe for zones outside the area of historical drilling. ( see below 5.3 RESOURCE REVIEW) This could be an Iron Ore district!!!!
SRN is planning to update the SS considering it was done at $120 AUD and now it's at $200 AUD.
NPV, Scoping Study Assuming we do not use HIsmelt and we just pluck the $120 per tonne AUD figure and just replace it with $200per tonne AUD we would increase the NPV from $223M to $1.115 B. Of course, that's approximate. The Opex and Capex could have changed but the study was done in 2012 so it shouldn't change that much. Now just bare with me, note from the Scoping Study below that it says a 2% increase in recovery yield would actually double the NPV!!!!!! Now they have used a very conservative yield of 42%. That means if we can reach 50% rejection, we can quadruple the NPV to $4.5b approximately. These are my calculations, they could be more or less in reality, one way to find out is when the updated SS comes out. I don't think it will take too long either. Now, much more work still needs to be done but as you can see SRN is at a far more advanced stage with a Bigger PROVEN INFERRED resource, Higher grade, Economical as it stands with conventional processes, a greater potential for a mammoth resource, and potential for base metals and Gold. Just imagine if we can use HIsmelt Technology or any new Technology for that matter, where would our NPV sit at? 10, 15, 20 billion dollars? GLTA
SRN Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
(20min delay)