Iron Ore Price / VMS Profit
The Iron Ore price as of today is US$164.14 and based on the VMS Feasibility Numbers in August 2019, VMS only need iron ore price to be US$90 to make AU$30M in 2 years. However, based on VMS recent interviews it appears the following:
- US$90 means AU$30M Profit
- US$120 means AU$60M Profit
- US$150 means AU$90M Profit
For BHP, FMG, RIO having AU$60M in the bank is like having small change, but for VMS with a Market Cap of AU$53M (at $0.053c), it would be amazing. However many companies do you know with the same amount of cash as its Market Cap; not many.
Is Riley Mine a Game Changer for VMS?The cash generated from Riley Mine eliminates future capital raises and any chance of the VMS going under in terms of Administration, Liquidation or Receivership; obviously without debts there is not chance of any of this.
Cash generated from Riley Mine also give VMS a lot more of exploring opportunities without going to the shareholders for money. Credit Suisse believe Iron Ore will be between US$125-US$150 in 2021 and US$110-US130 in 2022 when we only need the Iron Ore Price to be US$90 to be profitable.
The Wet Screening Plant can also be moved to Mount Lindsay Tin-Tungsten Project and with Electric Vehicle being the future, I expect Tin and Tungsten to also be a major play for VMS.
When will the Wet Screening Plant be Complete?
This is
This is probably the $64,000 question but the above photo was provided in the recent ASX announcement: New World Metal Conference dated 9 December 2020.
I assume the photo was take a few weeks earlier than the actual announcement.
See:
https://www.ventureminerals.com.au/index.php/investor-resources/asx-announcements-page/venture-minerals-presentation-new-world-metals-conference-2020/downloadMy understanding from Andrew's interviews is the Wet Screening Plant is expected to be completed late January 2021.
Funding for the Wet Screening Plant / Finance Approval
Looking at the Riley Project Cost Schedule and the fact we had AU$5M at 30 November 2020 in the bank, we only need AU$3M for the Wet Screening Plant. Note these are just estimates and can change and the cash is at 30 November 2020 and VMS share price is now $0.053 and Market Cap is A$53M
This is the reason why VMS started the Wet Screening Plant without Finance Approval.
I actually think VMS has enough money to complete it the VMS but obviously they need to have money in the bank account to operate the business and exploration in other parts of Australia. VMS also need to pay for workers, the shipping, insurance, storage, working capital etc etc and that is why we need the Finance Approval. But purely from the constructions of the Wet Screening Plant, I believe we have enough money.
I think VMS plan is to complete the Wet Screening Plant as much as possible then get Finance Approval; let's just say a completed Wet Screening Plant with high Iron Ore price is a very convincing financial approval submission.
Please note that there is zero suggestion of any capital raise, however in the worst case scenario, I would say that if for some strange reason was can't get Finance Approval, then a small capital raise could be the solution.Let's just say a complete wet screening plant with high iron price and the likelihood of the last capital raise for a very long term, I'm confident that any capital raise will be heavily oversubscribed, especially if we see photos of a complete wet screening plant and a video wet screening plant in operation.
I repeat I believe there is zero chance there will be a capital raise especially with the cash at hand right now but I would be foolish not mention this.I hope this gives a clear picture those for just jumping on board VMS now.
Other projects are:
- Golden Grove North in WA with zinc and copper (possible game changer with VMS system)
- South West Project in WA with Chalice (possible game changer with Chalice, I believe they are waiting for permits)
- Mount Lindsay in TAS with Tin and Tungsten (possible game changer and perfect timing with Electric Vehicle evolution expected at its peak in 3-5 years; remember Wet Screening Plant from Riley Mine can be moved to Mount Lindsay to save costs)
Riley Mines may not be a game changer but it is what allows other projects to be VMS Game Changer.
Good times.
This is not investment advice, not financial advice, not legal advice, DYOR; I don't even work in the industry but a keen and happy VMS investor.
(20min delay)