Whilst there are bound to be a few ups and downs along the way,...

Whilst there are bound to be a few ups and downs along the way, Crown Mountain looks like a good opportunity. Bathurst have spent about US$12m, to get 22.2% of an opportunity with a current Net Present Value of US$469m. If Crown Mountain goes ahead and achieves the current expected outcome that US$12m would have an NPV of US$104m. (This is before the opportunity to acquire further shareholding up to 50% is considered).

The July 2020 bankable feasibility study anticipated 18 months for approvals/consent and then about an 18 month build. Once built the projected payback on the initial capital investment was 2 years. The latest Jamieson quarterly report indicated that there may be delays to both the consenting and funding of the Front End Engineering and Design work and that the 3 years to production timeline is likely to push out with an updated timeline currently being worked on.

Teck Resources are much larger, and well established, producing about 25Mt a year across 4 mines in the same region as Crown Mountain, which by comparison will only be producing 2Mt per year. The cost per tonne in the Crown Mountain Feasibility study are however similar to Teck Resources with both having production costs of around US$50/t and transport costs of US$30/t (I converted Teck Resources June 21 quarterly report of CAD$64/t production cost and CAD$42/t transport costs at 0.8 to get the USD). All in costs for Teck Resources appears to be about US$100/t and their coal mining operations remained profitable during 2020 (COVID). In terms of transport, being in an area with other successful mines is helpful as the transport infrastructure has already been established.

The Crown Mountain bankable feasibility study does not appear to directly disclose costs associated with water treatment - although it does highlight the approval of the Crown Mountain Selenium mitigation strategy as a risk during the consenting process. By comparison Teck Resources state that their water treatment operating costs are anticipated to increase from CAD$0.75/t (US$0.60/t) to CAD$3.0/t (US$2.40/t) over the next few years.

In summary it looks like a good opportunity which will hope to achieve decreased risk (and increased value) over the next 18 months or so as the required approval processes are worked through.