I post for my entertainment, not management's. Sure they keep an eye on what's being said and what the mood is between the unwashed on HC. So just updated my working spready with Argonauts effort, interestingly timed with the next assya release coming in on fumes of outside holes. I know from pers comms (very odd, I have few friends as you might imagine) at least one Argo broker made an absolute killing on this. Not surprising given when I google Argo-Agrimin and find out they were underwriters for the same team at Agrimin on multiple CR's. I doubt very much they are this late to the party. By the time brokers get around to selling a story publicly they are usually well set and looking to drum up support to sell into in my experience, but I'm a suspicious buggar so pay no attention...
Anyway, before I buggar off and consider my approach to this stock and HC in general (for the umpteenth time) going to post my work-in-progress spready updated with some of Argo's assumptions form that front page of the report I have access to on HC. First the HG zone as it were into a 'mining inventory'. I have 7Mt @ 3.8% Nb2O5 weighted avg from results to date, needs to anoather 7Mt below or outside at 1.2% to match Argo's 14Mt @ 2.5% mine inventory. 1.2% below the HG UZ seems optimistic (subject to hole 26 infill...) but some extra area expansion would make the numbers balance up.
I got no idea what Argo's capex estimate is, but I had my own estimates so far as per table below. There are various iterations of annual throughout, grade etc and adjusted capex to match bigger/smaller tonnage metrics.
Unless I know what Argo's "AISC" actually includes (ie depreciation or not) it's not a like for like comp, but they aren't a mile apart from mine, depreciation being the big question. Probably my $258/t ore cash cost plus sustaining and royalties swapped in would be very close to $299/t ore... or there is some major differnce and it's not close at all?
Points to note:
Obviously grade is king, and the ability to lift above Paragon's suggested "even 1% at 1Mtpa would be profitable" to something like 2.5% makes all the difference. Not a lot of tonnes but as I said, this project lends itself to high early free cashflow to repay debt and then expand to a Stage 2 2Mtpa plant down the track and make bank with the lower grade stuff.
To labour my point that PAR holes at 0.3% wasn;t going to run this stock in Nov last year before Luni assays were finally released, grade is king and low grade in a market like Nb out the middle of nowhere was going to struggle for funding.
Recoveries are a big variable. Paragon suggested 50% total recovery to product, easily could be that low. Argo's assumes 63% total net recovery to FeNb, could be that high. Could be lower...
Clearly if funded with a large capex plus another large chunk of equity to cover working cap, interest during construction, commitment & upfront fees, advisory & legal fees, independent technical expert costs, cost overrun facility beyond funded contingency as part of the total capex+ equity funding model it makes a lot of money so long as FeNb prices hold up. I'm sure CBMM will play nice and let in another 15ktpa producer.
Congratulations, holders are the proud owners of a Lassonde baby, not a dead duck walking.
GLTAH
(20min delay)
