Seems around 23.5c is right for now - for me that is current project NPV after tax, plus some sort of allowance for the better grades, and maybe something for their additional resources.
It still seems to me that there is upside well above that, but I expect the market will need to see a plan for monetising their additional resource and the market appetite to buy it. It looks to me that the slip in Zircon price with trade tensions and whatever other factors caused is something of a short term issue, but comment from other mineral sands suppliers still points to longer term supply constraints. So demand should be there for more supply and solid prices not too far in the future. .
I'd probably have held if it had stayed around 23.5, but I bailed at 27.5 on the way up thinking it was getting ahead of itself and with no suggestions of capacity expansion plans. But then it pops up to 25.5 on the close.
My plan now is to put it on my list for possible re-entry. And I will have another look around at some point to try and see what other competitive supply is coming on. Anyone on top of that?
With their cash and cash flow, things potentially could happen quickly. But they'll need to prove up some reserves first with the drilling they've got planned. And that seems firstly focused on increased mine life, not any increase in production. That's cheap gains, with just drilling capex to fund out of cashflows. And increased reserves and mine life upside from that.
IMA Price at posting:
25.5¢ Sentiment: Buy Disclosure: Held
