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A lot of the problems at Wolf were pretty clear to experienced people in the area. MT has done the one thing that the management of Wolf didn't in the early days - listen to them.
Devon and Cornwall in particular are home to some of the world's finest process engineers - this is out of nessecity - wheal Jane had a mineralogy that nobody knew how to tackle and the latter days of crofty required a skill set that was verging on alchemy due to the depressed tin price. To not use this resource was fatal to Wolf - they handed the design to a company with no knowledge of the mineralogy, no experience of the friability and no know how of what techniques are successful in the area.
Given the need for battery materials, I think there will be pressure and help to compress the time taken to re-open SC.
Same goes for lithium for batteries and efforts to get Trelavour going.
Fira 18.46
MT lists a set of reasons why Wolf failed and they all sound as if he knows what he is talking about. He seems to have understood very early on where the mistakes were made. It is encouraging to hear that Wolf managed to go into the black in their final week, but then it was too late. If Wolf worked it out then it should not be too difficult to start afresh and do much better. I think MT has listed all the changes he will/has made to run the show differently, and the model seems to be conservative in what it is taking into account. But then there are the unforseen glitches which may occur, so best be cautious.
Fira 11.17 I suspect that the number of holders is low as the cut off for the placing was I understand £25k, so no smaller investors until some time has gone by. So small deals are probably mostly buyers, unless you have some recent shareholder selling in dribs and drabs - unlikely I think.
This should and probably will be a success. Ultimately a lot of people got their fingers burnt here and its a bit like the current situation at Rambler where people need to see it to believe it.
TUN has raised the finance, so the market has already been re-assured sufficiently to part with £75m ( equity+debt+take-offs).
It produced a BFS earlier this year and has used its own testwork combined with operating and geological data from the previous owners to produce a new flowsheet.
As something like £200m was spent by previous owners, on the process plant and stripping, not a lot of extra capex is needed. They talk about starting production in July-Sept 2022, but I think it is likely they are being cautious in that estimate. So not long to wait. There are plenty of ways in which TUN could do better than expected, not least if mineral prices continue to rise. We will know about that as it happens...........
Prop & Vii,
I just wonder if the situation is slightly further back at or just inside Stage 2. The Wolfe days may have some valid historical data (as hinted at on the co website) but new DD is actually required by TW to take it forward with new financing models in place to reassure the market.
I am struggling to find any evidence of an actual CPR / DFS or mine plan. The Jorc figures for both reserves and resources on the co website look encouraging, and include some historical stripped inventory.
I'm along the lines of thinking that this will need to be formalised into at least a CPR referencing the new ownership. Maybe Mining Plus are already on the case with this.
This being said phrases like 'The summary of the Ore Resource Estimate for the Hemerdon Project is shown in Table and illustrates that Hemerdon is amongst the world’s largest CRIRSCO compliant tungsten reserves. ' are comforting to read.
More research required from my side before I commit.
All the best to you both
LB
Prop and Lovely
Lassonde Curve It seems to me we are the beginning of stage 4. So a steep upward trend in the share price may be expected. Why wait until Q2 2022?
https://kuchling.com/the-lassonde-curve-a-wild-ride/
Agree with you about MT. He is leaving managing the mine to someone else who he says is better able to do the job. That suggests he knows where his strengths are and the strengths of others in management - a very good quality to have.
I wish other mining companies - mentioning no names - had someone as competent as Mr M. Thompsons on board.
Good point on the Lassonde Curve - as TW remains 9-12 months from production, I shall consider putting in a wedge around Q2, 2022.
Morning all. A few familiar faces here from over the boarder :)
Nice clean ipo achieved fairly quickly. Trying to work out where TW is on the lassonde curve before taking a position here but good prospects for sure and a good team assembled at Hemerdon. Watching this one with interest.
GLA
ATB LB
What a great opportunity to revive mining in the South West (again). A shame about what happened last time, but it looks like a huge amount of research and work has been done to learn the lessons from the failed 2015 startup. It's just a question of execution now. Obviously some risk built into the share price, one must decide what ones own views of probability of success are in order to successful value the business. If you think there's an over 50% chance of achieving their (fairly conservative?) targets, then this is a BUY. Obviously price of tungsten is another variable which moves the equation significantly, and then also the price of tin, to a lesser extent.
Tungsten, though - an extremely strategic commodity of significant importance. 80% of production from China. Significantly less concentrate available on the world markets than there used to be, as China are making finished tungsten products with theirs now. Its actually quite hard to buy quality tungsten products made in the West now unfortunately, and this is something a lot of mining and drilling companies I'm sure would quite like to improve going forwards. The only way that will happen is if we secure supplies of tungsten concentrate. Hemerdon is a big piece of this jigsaw.
Another thing to mention is the Plant is being designed to produce byproduct tin and aggregates. Tin will be a useful revenue stream at current prices for sure. But the aggregates is something new that the previous operators did not engage in. Significant potential value at very low operating costs for this aggregate, and access to the port of Plymouth and rail facilities, means penetration of the London market is possible. Together tin and aggregates could pay for a substantial amount, at least half, of the total operating costs - if this potential is realised.
BombaySapphire
Comparables Big - Antofagasta, Boliden, Trevali
Small Breedon Aggregtes, Atalaya.
Devon /Cornwall at forefront of tin /copper/lithium mining in the UK imho
Good entry as long term value will only see upside here imho
A further point is that this share is likely to re-rate from a development rating to a producer rating. The large discount to the NAV that the current share price reflects will gradually diminish as we approach production in about 9-12 months time.
Presumably the FDC report was written before the amount to be raised from shareholders was known. If so, a further factor to consider is the reduction in financial risk due to more equity being raised i.e £39m rather than the £20m-£25m sought.
Not only does that give the company an extra cushion to cope with unforseen events, it may mean less debt is drawn down and therefore lower interest costs.
TUN looks as if it will be a big cash generator. I suspect once Hemerdon is up and running satisfactorily, we will see the company look for and find attractive acquisitions.
This is a great addition to the growing number of exciting mining companies in the SW.
The link did not work but look up Fox-Davies Capital on Linked In to find the research note.
Some text below - DYOR
Valuation
FDC has valued TWL at £255M using a 10% discount rate, an average £: US$ exchange rate of 1.42 and a life of mine tungsten price of US$270/mtu. This is an after tax figure but unfunded. These are very conservative assumptions, yet the mine still gives some of the best returns of any of the projects we have viewed recently. In 2018 the average price of tungsten was US$304/mtuand we ran the model at this price. It yielded an NPV of £294M and an IRR of 65%. Spot prices are currently $320/mtu.
Cash costs in lowest quartile
After allowing conservatively for by-products credits FDC believe that the cash cost of producing a mtu of WO3will be US$107/mtu, in the bottom quartile of global cash cost curve. This is illustrated on page 20 of this initiation report where the Argus Media global cost curve is reproduced. The FDC estimate for cash costs will be US$107permtu but the calculation uses a strong sterling exchange rate and very conservative aggregate sales. If sterling is weaker, tungsten recoveries higher, the tin price stronger and aggregate sales take-off, a possibility if a conveyor belt is built to the railway line, then cash costs could potentially turn negative.
Well worth reading the research note by Fox-Davies.
FDC has valued TWL at £255M using a 10% discount rate, an average sterling: US$ exchange rate of 1.42and a life of mine tungsten price of US$270/mtu. The IRR on these assumptions is 57%. Thes eare very conservative assumptions, yet the mine still gives some of the best returns of any of the projects we have viewed recently.
Current market cap of £108M (177M shares x £0.61) therefore potential for share price to grow significantly. The team have done well and I expect that to continue.
Still trying to figure out if this is priced correctly. Can anyone point me at a comparable company ?