ady without the soap opera...

...or would that take all the fun out of it - lol.

some great research from Danube below on another very interesting Lithium/Potash play right next door to ADY but with a much lower market cap. Potash is one of the hottest commodities of the moment and lithium looks set to have huge demand growth in the near future thanks to electric cars. This is a ground floor opportunity close to 20c...


re: it rises (Danube)
Code: ORE - OROCOBRE LIMITED (Director Activity Report | Google ORE) Post: 2980522 Reply to: #2980177 from RKS Views: 51
Posted: 10/06/08 21:34 Sentiment: Buy Disclosure: Stock Held From: 58.110.xxx.xxx
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I am not too excited about 24c. The problem is ORE is a hardly known story. There is not many people know about it, and less people care about potential of Salar Olaroz.

Salar Olaroz has total area of 180km2 could be as deep as 120m.

ORE has got 76km2 of it.

Martin Place Securities has used the average depth of 40m, which I considered as very conservation. The gravity used is 1.2.

We don't need rocket science to figure it out the "raw ore body" size, which is: 3648mt.

The porosity will decide what percentage of the "useful ore body" which is the brines that contain Li, K and other goodies.

Currently, ORE is using 10%

So the useful Ore body is 364.5mt

ADY is using 38% for its Rincon Salar nearby , use this number we will get 1386mt.

Now you need to plug in the Li and K grade to estimate the total resources.

We know that Li grade ia about 650ppm, and K grade is 9000ppm.

So ORE might have global resource of:
Li Metal: 237kt to 901kt,
In LiCO3: 1.26mt to 4.79mt
At $6500/t, IGV at: $8b to $31b

K Metal: 3.28mt to 12.5mt
in Potash (MOP) (KCL): 6.27mt to 23.8mt
Using $1000/t IGV: $6b to $23b

At higher estimate, it has about the similar amount of potash as RWD (24.43Mt SOP). Although with much less area, but with 10 times depth, and 2.5 times grade.

Using $10/t of MOP which is the price paid by BHP for Anglo Potash, ORE is worth minimum $62m for potash alone. Double that to $124m for more valuable Lithium.

The beauty is ORE has enough cash till the JORC resource by the end of this year, so there is little chance for capital dilution. Based on 61m shares fully diluted, ORE should be worth $2 after JORC.

Why it is only 24c now? I have asked the same question when MAK and RWD were at 24c.

Well, I don't know whether it could be up to $2, or when. Also, remind you, the $2 is based on worst case. At higher estimate, it could be well over $7.

Eventually, ORE's share price depends on the demand and supply of ORE shares. BUT, the risk of losing 24c for $2 return is very tempting.