Not really comparing apples with apples here as SFR will turn out to be a higher value per tonne of ore mined proposition than SIR at current spot prices for Au, Ni and Cu.
(1) Scenario 1 is basically an extrapolation of Bell Securities view of around 2Mt of ore. The company is trading at an EV of around A$2,850/tonne of Cu equiv. (2) Scenario 2 According to your estimate of around 20Mt of ore containing 620Kt of Ni or around 1.6Mt of Cu equiv or around 60% larger than SFR on a contained metal value basis. The company is trading at an EV of around A$285/tonne of Cu equiv. (3) SFR is trading at around A$1,000 per tonne of Cu equiv and is a high value/tonne ore body which will generate in the order of A$1.6B in Net Cash flow (4) JBM-Cosmos/Alec Mairs/Prospero – Around 140K tonnes of contained Ni or 300K tonnes of Cu equiv. Numbers are of the richter scale as the takeover was undertaken near top of the market ($3B).
Avg for the sector around A$400-450/T Cu Equiv suggesting your expanded case scenario of 20Mt or 620K tonnes of contained Ni may place the shares at closer to A$3.00 over the next 18 months or so.
Market currently appears to be pricing 10-12Mt of ore at 3% Ni, 1.4% Cu or thereabouts significantly higher than the current Bell Securities estimate.
Looking at the NOVA vs COSMOS Scenario it appears that SIR at a very early stage is already larger (on a Cu equiv basis) than COSMOS (and satellite deposits) at around 8% Ni equiv – comparable in grade to COSMOS etc.
Looking at the expanded case scenario of say 20Mt it would be larger than COSMOS and SANDFIRE combined on a contained metal value basis.
SIR Price at posting:
$2.05 Sentiment: Buy Disclosure: Held
