TNG ... MC of $1B ... why not?, page-3

Fingerling - a good set of questions. I don't hold SIR, and haven't been following it particularly. That said, let's do some comparisons:

* Nickel Vs Vanadium / Fe / Ti
- "Nova of 10.2Mt at 2.4% Ni, 1.0% Cu and 0.08% Co for 242,000 tonnes of nickel, 100,000 tonnes of copper and 7,700 tonnes of cobalt". I haven't really followed the nickel resources action of late, but some reading shows that it is way above their cost of production and doing well:

http://www.********.au/2014/07/16/you-cant-be-sirius-up-19-in-one-day/
http://www.smh.com.au/business/siri...-likely-to-draw-investors-20140714-3bx91.html

- So quite different resources. Right now Iron isn't exactly the flavour of the month, especially outside the low cost centres of the Pilbara, and even there, they're talking about all the new supply coming online depressing the price. The Breakaway report had a sensitivity analysis that showed on their numbers TNGs NPV is pretty sensitive to a drop in the iron price.

* 58m vs 5m cash. Note that that 5m was year end 2013. This is a big difference, as funding for TNG has to come, and until it is in place lots of people will be doubters. Anyone around in the GFC remembers that without money in the bank you just died, and lots of people still think the world macro situation is a bit precarious. 58m might not get SIR home, but it lets them do a lot more than 5m does. Funding of some form will be a big factor in seeing TNG rerated.

* SIR just announced their DFS. TNG's is due late 2014. Again, this is a de-risking thing, so worth a rerating.

Anyone got anything else? Despite all the abuse people who are negative cop, I would rather be as dispassionate and understanding of the downside as I can, and whenever someone says we can be $1 or a $5 stock, I think through what that would take. $5 for instance means we're at a market cap of ~$3B (fully diluted), is this realistic and in what scenario (yes, and in a few, which is why I hold!)?

For the record, I hold, will continue to hold, but already have over a Disallowed out of TNG, so I like it


--Q