CEO mentioned we have a highly sought after Hematite product so off-take should be no problem. I think maybe some want a piece of the company in return for a funding or off take deal.
Broker Ocean Equities believes there will be strong appetite from potential strategic partners and financiers to bring Equatorial Resources Mayoko Moussondji iron ore project into production.
Its comments come following Equatorial’s June quarterly report which highlights the results of the completed scoping study on the Mayoko Moussondji iron project in the Republic of Congo.
Morgan Stanley recently published a base case valuation of USD 255 million for the project with an expected internal rate of return of 33%. This compares very favorably with Equatorial’s current market capitalization of only USD 85 million especially considering the company’s strong cash balance a fact not missed by brokers.
Equatorial has now commenced with the preparation of its mining license application for Mayoko Moussondji as well as associated agreements over rail and port. A key component of the mining license application is the submission of a completed Environmental & Social Impact Assessment which the company announced it had successfully lodged with government during the quarter.
The quarter also saw the completion of the current drilling campaign, with an additional 15,000 meters of drilling to be incorporated into a resource upgrade for the project before the end of the calendar year. The completion of drilling, combined with a restructuring of management and operations teams is expected to lead to deliver a greater focus on value creation, increased efficiency and cost savings.
At the company’s Badondo iron project in the northern Congo which neighbours the likes of Sundance’s Mbalam Project and Affero’s Nkout Project, Equatorial announced that it has hired Consultant WorleyParsons to conduct a concept study designed to promote the optimum development path and attract financing for this massive region of untapped iron ore.
EQX Price at posting:
60.0¢ Sentiment: LT Buy Disclosure: Held
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