Thanks Pocko. Bem does indeed need people to stand up and say what they think. If it wasn't for your posts over the last few days inspiring people, I would never have bothered to post. It definitely has a value, and potentially, a very nice one at that.
More recently, RRR is planning on selling most of its license in Greenland. The license is over a number of deposits, but has some hematite also.
It is all inferred, the cost agreed was around 30p per ton inferred. The grades were similar to BEM.
We have numerous advantages over Greenland, numerous. Also, all our iron is on one area which is a distinct advantage over many deposits. We only need one pit, more than lightly The logistics of doing anything in Greenland are huge as you might expect. Infrastructure and transportation, road and sea are big obstacles to overcome here, not to mention power.
One could assume that with an inferred resource in Greenland at around 30p, our inferred could easily be 35p.
If we assume inferred is 35p, measured would be around 70p. Therefore indicated would be around 52p. I like to round these to inferred 35p, indicated 50p and measured around 65p, again staying on the conservative side.
We are safe going by these figures and if we get a higher price, all the better. It is far better being surprised by a higher price then being let down by a lower price.
Now, where BEM will come into its own is here.........
For instance: Bem may prove up 150mt at KN, let's assume most of it is indicated, which it probably will be in the next few months. Also, let's say we prove up a further 200mt in Kallak South. Let's say it will be inferred also. (There will be a lot of indicated here but lets keep it at inferred to be safe)
KN 150mt x 50p = £75m KS 200mt x 35p = £70m
Therefore, we are looking at around £145m This would give us a price per share of over 58p. (Being conservative and realistic )
Now the special divided as far as I'm concerned would be 50% of the TO price. £75m/ 250m shares = 30p per shareholder
Therefore, any shares being bought now will fetch nearly 300% + gross profit alone in the special divided. Then one can sell the shares or keep them for Ballek. The company would be cash rich and would not have to issue any more shares for Ballek.
1)Some figure were rounded for quick calculations 2)Used Shares in issue: 250m
If anyone wants to calculate a more accurate one, please be my guest. let me know if there are any miss calculations here. Babysitting and typing do not go together well.
How the value was arrived at, or more to the point, the %1, I don't know. I just know that the sale value was set at that price. It was not explained in the article that I read. I was in the pub at the time and using my iPhone. I wasn't able to put a link in to the article. I only used it as an example of deals being done for explorers because I became frustrated with wild expectations, but more to the point, persons intent on rubbishing the company. I'm all for valid criticism of the BOD, but I posted the example to serve a reminder that what we have in the ground does have a value. The exact value will always generate debate.
As for mybem, it was a great website but I recall the host growing weary...
Thanks for that info Pocko. The price for CFR iron ore fines spot 62% is around that.
The only way I have seen to value a resource is based on Inferred, Indicated and Measured. Inferred has less then 50% probability, Indicated 60- 70% and measured is 90%+ It is a very difficult thing to value a resource.
...the point was, that the companies were sold at a rate based at 1% of the current market value of of a dry metric tonne of ore. There was nothing complicated about the valuations in terms of mineralisations or purities etc.
Iron ore is currently $132 a dry metric tonne on the commodities market. The deals to which I referred were companies/miners in Austrralia sold purely on their assets in the ground. The price of the finished product is only relevant when used as a benchmark with which to set the discounted price against for the purposes of sale.
The resources in the ground, dependant upon the JORC classification have a value otherwise we might as well go home?
Pocko, I'll go first as we will both interrupt each other trying to talk :-) lol
There is such a thing as a the 1% DMTU, it is called 'a DRY Metric Ton Unit'. The DMTU is multiplied by every 1% of FE content to find the sale price. there are other factor depending on who is paying the transport costs etc.
Lets say a DMTU is $2 To work out the average price for the 62% fine FE, you would multiply one DMTU x every 1% of FE content to calculate the DMT(Dry Metric Ton).
DMTU x 62% = DMT price
For 69%, you multiply every 1% of FE by the DMTU price. 69% x DMTU, but this time you add around between $3 - $7 for every % above 62% for the premium of FE and the premium for low alumina.
This is what is understood by the 1% DMTU to calculate the DMT.
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