Why Colossus Scoping Study will trump MEI Caldiera

Given the brutal sell down over the past three days, I figure it's a good time to take take stock and look forward to VMM's upcoming scoping study for Colossus.

VMM has been sold down worse than MEI post scoping study, and I believe this represents a serious value discrepancy.

Here are three reasons why VMM Colossus' scoping study will greatly exceed MEI's Caldeira financials.

1. VMM head grade will be substantially higher than MEI - 3917 ppm vs 3500 ppm. VMM is 12% higher in head grade which should translate to 12% higher revenue for similar OPEX given metallurgy is consistent between Caldeira and Colossus.

VMM, Brazil Virtual Resources Conference Presentation


MEI, page 2 scoping study

2. VMM does not have a private royalty against their tenements vs 4.75% for MEI. That's an additional 4.75% revenue for VMM (in conjunction with 1., we are now at 17.3% higher revenue per tonne vs MEI)


3. VMM can leverage their JV with Ionic Technologies to achieve 100% payability as oxides vs 70% for MEI making MREC. Now a disclaimer - VMM are doing two separate scoping studies for Colossus making MREC (Q3 2024) and the JV facility. The reaction to MEI's scoping study may force VMM's hand to join the studies together, which may result in significantly higher revenue per tonne ore when multiplied with the higher head grade and no private royalty above.

And two bonus reasons which are speculative:
4. VMM can tweak their SS with Hatch to improve the financial metrics given what MEI have done. I have already mentioned increasing throughput to improve capital efficiency with scale, and a 10+ mtpa throughput should both see a lower CAPEX per unit REO produced, as well as significantly higher NPV8 numbers which can justify a higher market cap. Hatch & VMM may also carry out other tweaks to trade off higher OPEX for lower CAPEX as they see fit (e.g. contract vs owner operator mining as an example).
5. Colossus is outside of environmental protection and buffer zones and as such carries significantly lower permitting risk.

Good luck to holders and enjoy the bargain basement prices while they last.