i recall mentioning my share market retardedness on another...

i recall mentioning my share market retardedness on another thread

seems like i was only one of three buyers today, spending $1,000 on 10,000 options

the market cap seemed low enough, now $17m

but today, the market was not interested in this SIR wannabee

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to my shock & horror, FRG owns 75% of Balla Balla, which brings up memories of escaping AXO without loss just before it fell into a heap

Balla Balla has had 3 BFS's already done on it, 1 x Ian Middlemass and 2 x AXO

AXO got $30.40/t opex and FRG seem to have increased that to $39/FOB, with the benefit of ilmenite credits

AXO's CAPEX was $600M, including $150m for slurry pipe, for 6mtpa of 57% iron concentrate and 280,000tpa of ilmenite concentrate

AXO's grind size was 106 microns, which is extremely good, resulting in the very low opex (from very good 44% grade ore). FRG told be today they were looking at a grind in the 90s [their opinion]. this would cause the increased costs but will probably produce a better product [my opinion]

a grind at say 94 microns is still excellent

at total $90/t iron ore, 5% royalty, $45/t opex, $30mpa depreciation, $15m interest and 32% tax, i get total $135m pa NPAT or $100m NPAT for FRG's 75% share

payback is 3.6 years, say 4 years, which is OK

can they raise $600M at this time?

on 67% debt financing & 33% capex raised at 50 cents, i get 22 cents EPS or $1.80 share price target


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FRG have $28,250,000 in debt, costing 15% pa in compounding interest over the next two years (before falling to 5% pa)

i am not sure how valuable the Eucla HM is? the grade looks good at 4.6% but it seems very high in lower value ilmenite and not high in higher value zircon?

possibly more research in this or someone can comment

regards