Interesting read. Looks like a reasonable company with some great potential.
Suggests Capex of around $50 per tonne for Mayoko which is in line with my estimated $250m capex for Mayoko project.
The opex of African Minerals is around $30 which is sensational. This is a lower cost then the big boys in the pilbara which goes to show how much cheaper labour is in Africa.
I have assumed an opex of around $50 for EQX but I think this is very conservative. At 5mtpa every $10 reduction in opex means an extra $50 million in revenue.
I use an Iron Ore price of $100 in my assumptions which is also quite conservative.
My hope is that EQX prove up at least 50 million tonnes of DSO which will support 10 years of production at 5mtpa. On a conservative margin of $50 Capex will be paid back in just over a year.
Applying a more realistic margin of $70 ($40 opex & $110 Iron Ore) the free cash flow will be $350m per annum.
EQX Price at posting:
$1.77 Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)