growing in buying strength again, page-8

This is the third or fourth time I have commented on share price rises with little, or no, 'spectacular' news coming out of CVV (What happens if something spectacular really does come out?).

The rise in Cu price has been spectacular and it is difficult to see current prices not being maintained or increased over the next decade from the flood of analyst reports and comments in media. There will be fluctuations but it does look like the trend will be up for Cu price and many other metals - supply and demand ultimately come to some form of equilibrium but that is in the unknown future for a trend that has just started.

The 2016 scoping study, pre ASIC rules, was positive at $2.75 Cu (even less actually) though some posters had significant doubts. Maybe the 90c analyst forecast will finally come to pass with some corporate action like you suggest?

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I saw the FQM article in The Northern Miner but went to the company's web site to get a screen shot. Below is a section of TNM's article that could relate to what was mentioned at the recent meeting regarding a potential offtake helping to fund the development of Bindi/Calingiri. [My understanding and wording of a brief comment at the meeting.]

Jackie Przybylowski of BMO Capital Markets says the deal was done at a “significant premium to the value that we ascribe to the asset.”

“Our previous NAV (10%) for Ravensthorpe was US$257 million (100% basis), so the POSCO transaction (which would imply a US$800M value on a 100% basis) is a 233% premium to our estimate,” she commented in a research note.

But she also pointed out that “minority stakes by strategic investors, including smelters seeking secure supply, are not new and historically completed at a premium.”

“These include Sumitomo/Sumitomo Metal Mining’s 30% stake in Teck’s QB2 project for US$1.2B, ~3x consensus NAV; Freeport-McMoRan’s sale of a 13% stake in the Morenci mine to Sumitomo Metal Mining for US$1B, deemed ‘a good deal for Freeport’ then; and Sumitomo Corporation and Korea Resources’ investments in (subsequent ownership of) the Ambatovy nickel project/mine in Madagascar. Anecdotally, we have seen fewer such investments in recent years, likely due to poor performance of some past investments (especially early-stage greenfields investments) and weaker commodities markets, which likely made securing strategic supplies less critical then.”

The analyst also forecast that “future strategic investments will be centred on battery raw materials, renewable energy, and other ‘green economy’ initiatives, rather than past investments which were focused on securing smelter feed. Nickel, cobalt, and copper are expected to be especially strategic metals.”

Farooq Hamed, an analyst at Raymond James, said in a research note to clients that he was carrying Ravensthorpe “at an NPV of $716 mln implying a value of ~215 mln for a 30% stake.”