scottm - a very good assessment. Conservative and realistic and essentially based on the 2012 JORC resource etc.
Where I think there is quite significant upside will, as per the March 15 Investor Presentation, be in the 2 stage approach to reassessing their resource - stage 1 being the drill program currently underway in the high-grade zone under the pit. As quoted ".... previous drilling did not clearly define the high-grade zone but rather produced a lower grade resource." By inference, the historical drilling was spaced way too far apart to accurately detect the presence of the concentrated high grade material - this drill program will/should address that issue and could have a significant impact on the projects overall official average JORC grade of 0.12% to 0.14%.
Stage 2 will be the subsequently drilling out of the Iron Duke and Petersons Lode - and this is where it could get really interesting because the Iron Duke runs right next to the eastern side of the pit, extends N/NE for about 1.2km and, in places, is either near or at the surface. Petersons Lode is located a bit further away from the pit. Both of these combined could potentially have the effect of a factorial increase in JORC resource.
And remember - only the tailings and stockpiles are included in the JV, so any additional resource found is 100% belonging to EQR and its shareholders with offtake material wide open for negotiation - this is massive upside, and none of it subject to royalty payments now that we own the head lease and have acquired the quarry revenue flow.
Scotts NPV estimates, roughly based on officlal JORC resource is $250 to $300M, but if the higher grades of the "king vein " are proven and the Iron Duke and Petersons Lode also prove up to, say, double the JORC resource then you can only use your imagination as to where the NPV could end up.
But in addition to this is the fact that Mt Carbine is in the centre of the " cluster triangle" formed by Wolfram Camp to the SW and Watershed to the NW. With EQR having the only operational and producing tungsten plant, they are in the box seat to have "leverage" when it comes to discussions about "cluster development" with Govt funding agencies or even private debt funders (perhaps on the back of offtake deals etc). Note that there has already been mention of establishing a "smelting plant" - herein lies significant economies of scale as well as the huge upside in the final price of the smelted product.
Underpinning all this are the huge intangible benefits of this project - right on the Mulligan Hwy, access to water, power, ticks all boxes environmentally, no social or community issues and enjoys the full support of Qld Govt.
The next few months should see a massive change in the project - full credit to Kevin, Oliver and team.
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