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Dcat, mind me asking how you know the first bit? Think you’ve mentioned a couple of times you thought they’d had some sort of pilot plant before even the one recently mentioned for Kitwe, but I’ve not really come across any info on that during my research.
We, or at least I, know that fodere tech has produced vanadium pentoxide from material grading 0.6%-1% vanadium and a 98% tio2 product from circa 30% tio2 feedstock. That feedstock also containing very high level of contaminants not seen at pitombieras…
I’m very confident that fodere tech applied to the concentrates current flow sheet produced (1% vanadium/42% tio2, with low contaminates) will produce similar results.
The larger unknown is if the current flowsheet can be amended and fodere tech applied without the ore having gone through the 2 stage dry and wet separation process. The change to the 2 stage prices between the PEA and technical report was the main driver of reduced recovery and higher costs between the two reports… RNS referencing improved recovery could be suggestive this is the case, however that’s something we need further data for..
Likewise if the vanadium and other materials are leached & treated out of the iron ore that should in theory increase the grade of contained iron from the current 62%, potentially increasing the value of that. Something else we’d need test work to see, but higher grade iron is both more valuable and attractive to offtakers..
Only numbers I’ve offered up to date is adding fodere tech to the current process for which we have the numbers. Using product fodere tech has got to and an added estimate opex of $100 per tonne against the product current flowsheet produced.
So basically. A ceo who does an interview with no sleep and with incorrect numbers.
. We do not know capital costs, operational costs. Purities we can get. If the process is commercialy viable.
For now it is interesting, but no way to trade without detail.
If it comes in and looks good i am a massive buyer. But once bitten
We don’t know how a new plant set up will look so the below won’t be correct, however the first set of numbers against each commodity shows their revenue in the technical report and then their weighting (%).
The middle number is exactly the same, but captures 100% of the vanadium value as if producing a V205 product which fodere tech would do by splitting it from the iron.
The 3rd set of numbers also envisages the 66k tio2 (42% grade) being processed into 20k 98% tio2 product for which se price should be nearer $2500 per tonne.
Like I said this is only demonstration as they don’t appear to be adding a fodere plant at the end of the process, but earlier on to also improve recovery rates. However it shows the affect of producing finalized vanadium and tio2 products, rather than selling as concentrated at concentrate prices, plus how such work should seriously reduce the weighting of iron in the commodity mix.
Current Just v205 upgrade
Iron $22.3m (50%) $22.3m (31%) £22.3m (21%)
Vanadium $8.5m (19%) $34m (48%) $34m (32%)
Tio2 $14.5m (31%) $14.5m (21%) $50m* (47%)
Total $45m $70.8m $106m
I think the polite comments would be Brian was tired from being up at 3am travelling.
The correct numbers I.e. those released in Technical report was 100% post tax IRR, $96.5m NPV and a 13mth payback using $120 iron price and $9.2 per lb V205.
It’s contradictory to talk about the great economics with a “9mth payback”, then saying you need $5 more per tonne sales price to be feasible!
It’s also not irrelevant. They’re looking to change the plant design by bringing in Fodere technology, that will alter the economics drastically and would also significantly reduce the weighting of iron within the basket of our commodities.
When referring to the project did I pick it up right that an iron ore price of $125 is where it becomes feasible?
I’ve been saying ‘Fodere’ all wrong it transpires!
Clearly going to take a while to unfold but intrigued where the $150m NPV, 9 month payback comes from if those were the first figures to jump into Brian’s head. Not sure I remember those being attached to any scenario released so far. I know he caveats he didn’t have paperwork to hand but still I don’t believe for one minute they don’t already have guestimates for the financials.
Hope you’re right!
Jangada of course have a 10% stake in BRES which is good news in its self when BRES shares are up 15%!
BUT, the big news is why would BRES extend warrants if no news due in next couple of months? Pointless as you could have bought in at same level as warrants anyway.
join the dots...
A double header from Brazil – Brian McMaster updates on Harvest Minerals and Jangada
https://total-market-solutions.com/2023/04/jangada-mines-harvest-minerals-april-2023/
I think under that scenario a p/e of 5 would equate to a shareprice of around 78p
Cheers Dcat, that probably helps to explain part of the waiting game we are enduring -- a prize of 50 million dollars profit per annum or thereabouts. A p/e ratio of five would see shares valued at...50p?!
Basically we do not know right.
Unlike tng who are explicit fodere are not.
Do we really know additional cost of process?. I did not see much on website.
Anyway. If they say it is game changing it should enhance profitability alot
My enthusiasm running ahead of me! I did once understand the difference between 62%/65% etc. some months ago but the thing’s gone on so long now I’ve forgotten all that research!
91% is the recovery, not the purity.
Does raise an interesting point i’d not considered though. if fodere process splits the minerals, does it take out the other contaminants in the iron oxide concentrate & thus increase the iron content? Pure fe203 would be circa 70% fe content, that’d get a huge premium to std 62% fe pricing. I honestly have no idea on that regard, could be a nice bonus & definitely more attractive to offtakers.
Lots of questions, but at sub £10m market cap (still) I’ve scanned this morning down all the smaller companies listed on LSE and I don’t spot one I’d rather be invested in despite the unknowns.
I’m guessing having some 91% iron oxide will be easier to raise offtake money for too, if that’s the main pricing environment that funding is hooked onto?
BF - too many variables to be sure, but if large enough fodere plant can be built for both concentrates and it’s high purity vanadium and tio2 produced then my estimate could be extra $30m pa post tax. Really need more info. Definitely exciting though
Thanks Dcat, I was delighted by that update. In terms of extra annual profit, do you see it in the 20-30 million dollars ballpark?
Hey Mesb, of the regular posters here I thought you’d be happiest to finally see something on
Fodere.
Expected use of their tech has been cornerstone of my reason for investing to position I have and as a long term hold, frustrating it’s taken this long for company to discuss it, however I suspect there was caution before any testing was done and that testing required the pilot plant based in kitwe.
Was happy to see we’ve the rights for S America, something we speculated on after the ex-Tronox guy invested in fodere last year and not the rights for N America. Would hardly have been fair for Jangada not to have S America rights as part of investing when we were earlier holder!
Not sure at what stage the fodere tech might be applied, suspect that will form part of the bulk sampling. Does the existing flow sheet stay with material only then put through fodere plant? Can we bin off the wet separation part of the process which added capex, opex and lowered recovery from the initial PEA & apply fodere plant after just a dry process? Will fodere be used on both the non-magnetic (tio2), just the magnetic (vanadium/iron) or the 2 separate post separation piles?
I’ve no doubt that fodere tech will significantly increase/improve the economics.
At the moment we only get 25% credit for the vanadium & the 2 stage process lowered recovery of that.
The Ilmenite concentrate at 42% grade has a sale price of $220 per tonne. 99% purity tio2 has a sale price of nearer $3k.
Lot of value still available which fodere tech should unlock, hopefully things will soon start falling more into place and the excitement we have will spread!
Surprised there’s still a 3 before the share price so after reflecting on it just bitten the bullet and added some.
Have been annoyed for a while about the BRES investment, not because it’s a bad company but because it cast doubt in my mind about whether the investment in Fodere was truly strategic. This RNS has dispelled that doubt, and the info on the rights in South America is great new info in my mind.
I take the references back to the 100% IRR project etc. with a pinch of salt because those financials now seem largely redundant if that project is not proceeding as previously envisaged. But I’m struggling to see how the next set of financials, when they eventually do come out, will not be attractive. Frustrating that really for the last 2 years we seem to have basically trod water, but what comes now could be miles better than what we might otherwise have had.
As an aside, I keep thinking about Tronox Brasil (not wholly owned by Tronox) who per their latest accounts still have not identified a new local resource given supplies from their end of life mine are about to run out.
@amin0406
I hope you realise my reply was somewhat tongue-in-cheek :)
Like I said yesterday, it's gonna take something special to get this really moving but today's RNS is a welcome update.
Thank you Brian! And swizz is alive and well!