RE: Amount of faith ?26 Jan 2022 17:35
Stampcollector- as far as junior mining goes Jangada is quite low risk, $5m cash in bank as of last accounts and the exploration work is again low risk with the deposit out cropping at surface, this also makes it cheap to drill as not wasting drilling metres to get to the mineralized ore.
Next steps we really are awaiting the update. The PEA issued last year looked at the scenario of producing just a concentrate solution, it’s the lowest cost and most simple processing option and also within our own financial means to progress. It is however despite the excellent numbers within the PEA the least efficient way to monetize the asset, adding more plant to upgrade the products beyond a concentrate adds more value, however obviously at the cost of more capex.
The next update should hopefully give us an idea on route being proceeded with. If just the concentrate route as per the PEA released I’d estimate a 3mt-6mth period for sourcing and commissioning the basic plant required for it. Post tax free cash flow should exceed $20m per annum and if you used a conservative 5x that level then $100m MC would be fair. Obviously what’s fair and what the market values it at are different things, I wouldn’t hazard a guess exactly what we’d end up at in the shorter term from then, but many multiple of current levels would be expected.
If the company decides to go down the route of a wider operation with additional plant then a partner will be required to progress and the period to mine build longer, additional licencing might also be required depending on the throughput of such wider operation and any additional plant at site.
It’s hard to call a fair value on a bigger/wider operation without seeing the economics which we’d expect in the update, however the numbers would be much bigger. That report itself would be a catalyst for a re-rate, more so though agreement on financing with say a partner.
As we’ve the concentrate options available to ourselves we’d be in quite a strong negotiation position with any 3rd party for wider operation, personally I’d see wider operation as a preference. If you look back through my posts over the last 2 years on the potential of the Tio2 within our deposit (roughly 10 times the grade of mineral sand deposits) you’ll see there is the potential for blue sky returns.
Sorry can’t help more, but we really need the DFS and any other updates to answer your question in more detail. Hopefully it helps a little though.
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