ILU right now has some bargaining chips. They could wait till SFX desperately need a takeover. However, If there was a party who wants to challenge ILU's leadership, they can start accumulating shares to create a hostile takeover. From my perspective,The Black Rock and the Bommonwealth Bank will not increase their holding if they don't see a bargain.
42 year mine life I assume was only the highest grade part of the Thunderbird project (1 billion @12%). I believe they mentioned many times that the Thunderbird project has 3.2 billion ore @6.9% . The potential value could be a lot higher given the technology will definitely improve 42 years later to help mine lower grade parts.
Regarding 2ic's comment on Chinese RE slow down, there are many research papers in China predict that the zircon consumption for ceramic tiles will drop from 150k tonnes in 2017 to 70k tonnes in 2025. However, given that zircon chemical is the only catalyst for fossil fuel vehicle's emissions and the Chinese policies on environmental controls, those papers do predict a rise of 240k tonnes zircon demand as of 2025 (from 120k in 2017 to 360k in 2025). While I was in China earlier this year, the Chinese Government just introduced the national vehicle standard 6, which is one level higher than the previous standard 5 (mainly less emissions).
5G is another game changer here. The zircon demand for advanced ceramics is predicted to rise from 80k tonnes in 2017 to 240k tonnes in 2025.
Also, China is building another 44 nuclear power plants and unknown amount of nuclear submarines. The demand will increase but won't be substantial. It's around 10k tonnes zircon sand according to a research paper.
Apart from RE, foundry sector will see a zircon demand drop from 10k tonnes to 5k tonnes from 2017 to 2025 due to the improvement of the recycling technology.
The India's economy boost will probably ease demand drop for ceramic tiles( this is my opinion).
With 1.4-1.5 million tonnes demand for zircon sand, how many new mines need to come online given that the current supply in 2025 is predicted to be 750k tonnes?
SFX Price at posting:
63.5¢ Sentiment: Hold Disclosure: Held
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