Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Hi Garf
We're in Russia. That's the issue and the one which will have the biggest impact on what Amur can get for Kun Manie.
TDT
TDT,
Was it in the early Crux interviews where they said that the better Projects would be purchased first. Money would then feed its way into those second tier projects which is probably where KM sits.
If you then look at what it would cost to buy / develop KM we are probably talking circa $1b. If you were a potential purchaser could that money be put to better use? Are there other Projects out there that offer improved margins / lower risk. ie BHP are developing Nickel West.
Sooner or later those projects will have been purchased / developed. That should leave KM in a good position. Sooner if they can come up with improved figures / metrics.
Would agree with your comment on the resource and no doubt some is being deliberately left for a potential purchaser.
What are we worth? Talon have a market cap of £290m. I can see that they have one Project of which they own 51%. They appear to have sold the other Project. Not sure if you have had a look at them but the market cap appears high.
Garf
Garf
The web site states the following:-
"The limits of the mineralisation are not yet defined and substantial potential remains to be tested in multiple areas within the production licence boundary."
The problem we have with the web site is they haven't been updating it so we don't know if that statement is pre or post the 2018 drilling campaign. Even if it is pre 2018 you would have to assume that there's still more nickel to find both within the current licence and immediately adjacent. There has to be more of the stuff still out there.
Whoever buys KM will have a fair idea of how much more it's likely to contain. I would expect a reasonable chunk to be left for the buyer to discover, if/when we find a buyer. I don't think there will be many potential buyers but you only need one. It then comes down to what there prepared to pony up.
TDT
TDT
TDT
The figures are taken from the Feb 2019 PFS showing the TS option. From an IRR perspective the project looks good. The graphic is colour coded green, amber and red with KM in the green with an IRR of 29.3%. The FFS option is 34.7%. By comparison the Talon figures are very good but it should be noted that they have used a 7% discount rate. A 10% discount rate (as used by AMC) would knock approx $100m off the NPV.
Looking around at some of the other graphics used by some other companies. FPX Nickel’s Baptiste Project includes a graphic of C1 costs and mine life About 10 Projects are shown. KM does not appear too good with a C1 operating cost of $3.87 and a mine life of 15 years. However again they have used the TS option. Use the FFS option and the C1 costs fall to $2.45. Use the increased by products credit of $1.287b and the C1 cost fall to $2.00. If RY can increase the mine life above 15 years the graphic will become much more favourable. Say C1 cost of $2.00 and mine life of 20 years.
All of the above sounds positive.
What does stand out when you look at other projects is our lack of progress. PFS Feb 2019. Updates since. Nothing.
BoldlyGo
Look at 1.2 Project Setting in the PFS, page 3:-
"Figure 1.1 presents a schematic layout of available infrastructure in relation to the project location within the Russian Federation."
It would be reasonable to conclude from that document that infrastructure was in place and, in fact, some of it is. We know, however, that it's not.
TDT
I see we have a 'Yes' for Infrastructure in the first slide
"Source: Company reports and Talon research. Disclaimer: Talon endeavours to update data when new reports are published, however, figures may not be completely up to date."
Noloss
I would expect Talon has had to employ a fair degree of guess work with Amur given all the unknowns. Having said that you'd have to assume that our position would have to improve once the unknown become known.
Interesting that one slide has us down as OP whereas the other a combination of UG and OP. We really need to pin down the fundamentals before we can feel confident about anything else.
TDT
TDT,
Saw that earlier, looking good re capex and IRR I'd say.
Thanks to DRH3 over on the other channel.
Interesting to see where we sit in relation to some of the competition.
https://www.dropbox.com/s/a2yuqij7ewvj6pn/talon_35.png?dl=0
https://www.dropbox.com/s/6ekyd7sxe1e2xaa/talon_36.png?dl=0
If you're interested you can access the whole document here.
https://talonmetals.com/wp-content/uploads/2021/05/TLO_Presentation_May_2021.pdf
TDT