EQR 4.35% 4.4¢ eq resources limited

Pre feasibility tungsten comparisons

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    All the main Aussie tungsten players have put out PFS of late with EQR expected in the next couple of months. EQR's figures are from their 2012 PFS. A couple of points to make.

    In 2012 EQR didn't have the quarry & head lease (value $15m to $25m).
    Quarry is a by product and will reduce costs.

    If we bring the currency inline with the others given the tungsten price is similar we get $230m NPV and a shorter payback & an increased IRR.

    Additionally, this doesn't include other deposits that could add 10 years plus - Iron Duke, Petersens and West Dyke (based on previous geologist comments). On top of this management are expected to reduce the capex (guesstimate sub $40m) by only mining the king veins.

    Therefore based on current market caps (Friday's closing prices) TGN $169m EQR $45.5m KIS $70m RFR $12.5m, we are well placed, given the information in the table below and we are actually producing tungsten and have cashflow. If the tungsten remains low, then the others are unlikely to fly apart from RFR as their actual base case is $US240mtu.


    Resource SizeGradeTungsten totalProduction paProject LifePre tax IRRPrice AssumptionAUDOpex/ mtuPre tax NPVCapexPayback period
    1KIS4.43m t0.92%4.08m mtu300k t pa ore14 yrs43%US29570c$129.80$A 241mA129.2m2.25 yrs
    2RFR10.61m0.17%1.853m mtu1.3m t pa ore5yrs163%US 30071cUS 115.63$A40.3mA 11.3m5 mths
    3TGN (Mt Mulgine) 140m t0.10%460k mtu pa6m t pa23.5 yrs10.83%US30070cUS 92$A422mA669m
    4EQR47m t0.12%260k mtu pa3m t pa15 yrs +60%US 290$1
    $A161mA53.8m1.5yr

 
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