Peer comparison4 Mar 2018 18:08
Did a quick peer comparison with Giga today
Giga metals has Ni as measured res of 227mt @ 0.22 (+0.014% Co), indicated 638mt @ 0.21% (+0.013% Co), and inferred 976mt @ 0.2% (+0.013% Co) with drilling to date 75,000m. With more drilling of Zeb resource there is easily potential imo to match if not exceed Giga measured and indicated. Our total (including inferred) resource is alreadty with in 15%.
Giga has a higher initial capex 1.36b vs zeb 708m we have a better IRR, better strip ratio, roughly half the payback period, we have a much lower annual operating cash flow 200m vs their 316m but their intial (1-5yr) cash flow is similar at 208m. So again as with Dumont we look none too shabby imo. Giga previously had Mcap of 150m when Ni prices were higher. URU sp with 1b issued shares (including dilution for extra drilling at price similar to recent raising) would be 15p.
One interesting thing reg Giga they were thinking of going down the hydrometallurgy route but managed through extra metallurgical testing to improve Ni recovery and so updated PEA for froth floatation, this option is still open for uru if Ni does start looking to go much above 8.5/lb imo its poss the team would forgo the slow process of large scale test heap leach study, updated pea etc etc and continue with more conventional processing with a likely significant reduction in time to completed BFS. Hypothetically at this stage (assuming study results are favourable and with proven reserve in place a sale in the high 100's of millions is very realistic.
Taking a number from a prev post where I ref JM of HZM talking at Mom Evt who mentioned post feasibility sale prices of 25c/lb of Ni in ground = 18p, even reducing this to say 10p and assuming dilution to 1.5b issued shares and assuming �50m kept back for Burgs development. A sale at that point could imo realistically provide a divi of around 50p- almost a 50 bagger from now and the ex div sp would obviously mean significant residual additional value.
There will likely be many opportunities to sell Zeb and as Ive said before the more proved up it is the more I will go for, personally i'm happy to wait an have faith BoD will judge this well
So looking at our MCap imo as with our peers (eg HZMs cheap asset acquisition from Vale) we are massively undervalued but things appear to be changing on many fronts resource/jurisdiction/Ni price and stockpiles/future demand and I trust the BoD to time everything as best they can to make themselves (and by default me) the most money possible.
Btw cobalt 27 just bought 1.75 NSR (profit) of Dumont for 70m valuing pre construction (massively discounted) LoM @ 4billion CAD, big players and big money are starting to move on these large projects for us imo its just a matter of time
I dont mean these to be rampy or otherwise, above link is to gigas pea, I could easily have made a mistake somewhere, mainly posting now as stuck inside @ mo and to record my thoughts and all this
Sign In
Follow the stocks
