Recent posts on APG have put some heady estimates of the likely...

Recent posts on APG have put some heady estimates of the likely price BHP might stump up to bring APG into its fold. Most of those have been derived from the value to BHP of acquiring (and denying it to its competitors) the exciting DRI technology that APG has developed. But while this technology appears to be the imperative driving BHP to take over this little Aussie battler, APG has a number of other assets we shouldn't forget about.

While it might not fall into the "must have" category , the WIM150 deposit in the Murray Basin, in particular, is now looking like it could be worth a bomb. Until recently, this was a monster but uncommercial deposit - its fine grain sands defeating past attempts to make a quid from it. But it appears the magicians at APG have succeeded in cracking the agglomeration technology needed to render this deposit commercial. What's more, mineral sands are a good fit with BHP's existing business as it is already a major player in the mineral sands industry (eg 50% share of Richards Bay in South Africa and its TiGen project in Mozambique).

WIM150 is one of the biggest (if not the) deposits in the world on a contained heavy minerals basis. Just how significant the WIM150 asset might be to BHP can be gathered by comparing the size of the resource against comparable deposits. For example, according to TZ Minerals International, WIM150 hosts a resource of over 1000 million tonnes, with contained zircon on 5.3 million tonnes. (It also has a core of 452 million tonnes of measured resource containing 5.9% heavy minerals). By comparison, the nearby Douglas mineral sands deposit hosts a resource of 614 million tonnes with contained zircon of 2.27 million tonnes. (This is the deposit that Iluka bought in 2002 via a $130m takeover of Basin Minerals). Similarly, the nearby Gingko and Jargarup deposits of BeMax host a resource of 205 and 30 million tonnes with contained zircon of 0.68 and 0.20 million tonnes respectively. (BeMax's market cap is about $250m).

Thus, the combined resources at Douglas and those of BeMax's deposits represent around 85% of what is present at WIM150 (and only 60% on a contained zircon basis). And a rough as guts proxy for their worth indicates a figure of around $380m. That very crude measure at least gives some indication of the scale of value that could potentially be attached to APG's WIM150.

I know this is rough as guts, but does this suggest that if the agglomeration technology has indeed unlocked the value of WIM150, it could potentially be worth $380m/568m shares on issue - around 71 cents a share?

Obviously all this heady talk about APG being on the cusp of a very rosy future must be getting to me. Time to take a Bex, lie down and dream of many more days of the share price rocketing in the green!