Now its $4 mil market cap, I don't know where the SP will go but you have to weigh up the risks and benefits and rationally decide from this
The risks I see at present - broader economy/nickel demand - mining tax - cash in bank - granting of mining licence
Project finance seems OK because MFC is funding development and Proto have no debt. Proto has recently bought MFC shares. We should get the answer to the mining licence soon unless there has been some barrier to this.
Weigh these up against the benefits, summarised below before any resource reestimation and are a worst case scenario.
(Borrowed from Narasimha's post):
Material recovery
Available nickel @.008% = 8Kg/Tonne of ore Recoverable nickel @.75% = 6Kg/Tonne of ore Ore available 8.5 Million Tonnes = 51,000 Tonnes
Assumptions for production cost
Royalty & Sundry expenses = $0.17/Kg $1/Tonne Drilling & blasting = $1.00/Kg $6/Tonne Excavation = $0.58/Kg $3.5/Tonne Transportation to smelter = $1.25/Kg $7.5/Tonne $3.00/Kg $18.00/Tonne Cost of ore at smelter = $3.00/Kg Smelting cost = $3.00/Kg handling at smelter = $0.50/Kg Overheads and contingency = $0.50/Kg Handling and shipping = $1.00/Kg Total Cost at Sales Time = $8.00/Kg
Assuming 10 years of mine life Yr Tonnes Profit/Tonne Value in Millions 1 4000 4500 18 2 5000 4500 22.5 3 6000 4500 27 4 6000 4500 27 5 6000 4500 27 6 6000 4500 27 7 6000 4500 27 8 4000 4500 18 9 4000 4500 18 10 4000 4500 18
51,000 Tonnes $230 Millions
* No credits for cobalt,iron and other metals is considered
In weighing up this, one would have to say it is way oversold at the moment due to tax loss selling, unless there is some other factor at play I haven't considered.
PRW Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
