Iron Awe - how and why HIO could 100X, page-221

That is very insightful and extradinary facts @Mas37. Yes, HIO is in perfectly similar stage in that time slot from JAN 2016-FEB 2017 of CIA.asx

On 30/01/2017 CIA ASX Appendix 3B update, the total number of shares and options (all options were in the money at that time) was around 423.5mil and therefore on a fully diluted basis, MC of CIA was around = CAD $487mil = around AUD $500mil.

The company was valued at around

AUD $500mil based on the Bloom Lake iron ore project, the PFS of which was released on 17/02/2017, with NPV = CAD $984mil.

Bloom Lake iron project at PFS release was:

- NPV 8% = CAD $984mil = around AUD $1bil.
- CAPEX = CAD $327mil
- Annual production = 7.4mil tons concentrate
- Product grade = Fe66.2%
- LOM = 21 years
- Expected product (Fe66.2%) selling price = USD $78.40/ton
- LOM gross revenue = 21 years × 7.4mil tons × $78.40 = USD $12.2bil = CAD $15.1bil.


HIO's coming BFS release expected to show:

- NPV8% = AUD $4bil (my estimate) to AUD $9.3bil (KPS report's estimate). Most likely somewhere in between.
- CAPEX = expected AUD $2bil.
- Annual production = 10mil-12mil tons of concentrate.
- Product grade = Fe69.8%-Fe69.9%
- LOM = 30years-35years (or stay with 20 years but annual production increases to 15mil-20mil tons per year)
- Expected product (Fe69.9%) selling price = USD $140/ton CFR (based on assumed Fe62% of USD $100/ton).
- LOM gross revenue = 30 years × $140/ton × 12mil tons per year = USD $50.4bil.


Sheer differences!

Hawsons project's NPV is sheer diiference to Bloom Lake in all metrics except CAPEX. The market valued Bloom Lake project at AUD $500mil at that time, around the time of the PFS release, based a NPV of around $1bil versus HIO's AUD $4bil NPV project.

What HIO should be valued at the time of BFS release? In economics sense and in mathematical sense I think it should be valued at multiples of that $500mil. But let the market decide in the months ahead.