Member Info for Dcat80

It’s good news, formal approval was targeted Q3 and looks like it’ll be early Q3.

Back in October last year number of changes were made to the TM process including that whilst a licence can be issued before environment permit, the license is only active upon receipt of the environment permit. Swizz tweet at the time includes details

https://twitter.com/swiizz/status/1322103600416514048?s=21

Obelix - rollovers again. You can tell as usually same shares, seconds apart and one of the two transactions either at bid or ask.

The book is looking good for a move though.

Make it little over $6m USD from cash as of 31/12, various Valore share sales and placing. Course they’ll be cash burn, but I’d really like to think we’re now well and truly in a position where offtaker advance could cover any remaining CAPEX.

Certainly don’t think we’d be selling those Valore shares without a degrees of confidence TM approval will land

Troajan - chain below gives good intro

We don’t need a JV for the DSO operation, it’s more if partner we might work with at a later stage wants a small position now and if doing so gives us some more financial derisk. In that scenario it’s only a small portion probably at project level.

If we’re planning for larger operation then I’d envisage Obelix previous post on %/buy in amounts as probably in the ball park.

We can of course be running a DSO operation whilst progressing plans for a bigger operation and the plant used in DSO would likely be first stage of any larger operation anyway, most of which process the non magnetic and magnetic ores separately.

TM via DSO really should be considered as very much the first stage of production, a huge dersk towards them.

Gallmat - patience is in some ways hardest part, along with accepting there might be few bumps on the road but to keep eyes on destination. It took me years and some guidance from some more experienced than I to get there (Remy really helped challenge my way of thinking before he joined Arcm BOD as did Swizz that poses here). Really is a mindset thing

Later stages for me are buying the TM and next year. I’ll revisit my fair value target once TM is confirmed, we know the specifics and we’re that much closer to production with these volatile commodity prices!

For now late teens early 20s SP zone equivalent to 50%-70% of current PEA is my fair value for a project of the economics demonstrated. They didn’t include any Tio2 credit, nor the resource upgrade/continued drilling or even our cash position/Valore shares or position in Fodere group.

Gallmat- if it’s what we’d want rather than what’s allowed if go no TM limits! There will be limits though, however even at base case we should be getting in free cash flow over the current MC. That’ll allow us to seriously progress the rest of the project.

TM will not just be a significant step forward for us, it’s a serious derisk towards later objectives such as full mining licence and upgrading the Tio2 into higher value product such as pigment grade. If everything comes together in that regard conversations on SP will be in £s not pennies, that as I keep stressing though is the later stages.

Not expecting TM approval imminently, August/September more likely. Other items well before that including offtaker agreement, ideally with advance in return for bigger discount to spot prices could turn up at any time though

BF - if (not sure we can) 200k of non-magnetic concentrate was sold I’d suggest extra $20m PA. That’s based on circa 66% Ilmenite within (33% Tio2 content, Ilmenite circa 50% Tio2), Ilmenite circa $330 per tonne and $80 per tonne logistics costs. Won’t be exact, but until confirmed figures best I can do. Nowhere near as profitable as processing into a pigment grade product, but shouldn’t need any additional plant (chemical plant for pigment grade won’t be cheap as we’ve previously covered)

Thanks Troajan

Can only speculate. Obvious possibilities are
- if building plant then do so to what your expect to use in 2 years, but only operate 50% time until then
- planning on building 500k capacity now, upgrading in year 2

Believe TM limit expected 300kt of saleable material in first 2 years, doubling to 600k after 2 years. This was referred to in the logistics report released I think back in 2019.

Your 60% is correct, so for 300kt saleable ferrovanadium concentrate you need to process 500k. For 600k you need to process 1m, maybe little spare capacity to cover maintenance etc?

The concentrate is 95% iron plus the vanadium, you don’t need to multiply by 50%.

I’m more inclined to think SP disappointment is few traders were in buying the dips that went below 7p at one stage, few desperate to build elsewhere (we had someone smashing the bid into close on Tuesday multiple times). Then we’ve seem extremely poor selling again today.

Yesterday
Traded 5,352,074 at VWAP 8.78p
Earlier Today
Traded 355,573 at VWAP 8.2p

Idiots either selling out 1 day after buying in at 10% loss

Or

Idiots in before yesterday not understanding when to sell

Ultimately yesterday was a great day for anyone that wanted to sell to do so, whilst I think it’s bad decision to do
so far below what I consider current fair value (with work progress adding to that), they’ll always be some wanting funds.

Definitely frustrating day after yesterday’s volume to see such selling now. We can at least hope the majority are sensible and sold yesterday and buyers are just waiting to see that’s the case!!

O&W - posted below on Twitter yesterday

Maiden resource
PN
1.4m measured & indicated
3.4m inferred

Goela 700k inferred

Updated resource

PN
5.1m measures and indicated
2.3m inferred

Goela - awaiting assays, going from 6 to 16holes should add lot to inferred there.

I make that circa 54% increase in overall resource at pitombieras, with M&I now nearer 70% of that up from 30%.

I’m expecting a much more significant increase at goela. You need 4 holes just for one square/block, 6 holes drilled if adjacent for 2 squares/blocks. Add on the planned 10 additional holes and you can get a feel for level increases expected (some of the square paper seen in maths exercise books can be a good visual aid).

ODR - feel your pain, I was buying before the expected BFS when Pedra Branca was focus. Was sitting on 50% paper loss for sometime as were a number of others. Only once I got a handle on pitombieras did I start buying again leaving me with a good size block bought at 2p average, haven’t sold any, gains elsewhere doing well allowed me to also buy more smaller blocks at 6.6p, 7.8p and 9.4p.

Hopefully you’ll have the option of selling your stock at 5x your average within a year, certainly number of catalysts which could make that possible if project all progresses as planned.

Industry norm is to report the Tio2 content. Quick google search and you’ll see Ilmenite roughly has a Tio2 content of 50%. As such just double the Tio2 tonnage in the resource report and you’ll get feel for amount Ilmenite there.

Yes we could probably sell an Ilmenite concentrate, no we probably shouldn’t as it’s wast of material that would produce high margins from upgrading ourselves. Plus can’t just decide to start selling more material as trial mining limits apply, so let those limits be used on the iron/vanadium and hold onto the Tio2 until a later time

Jangada for dummies part 1

Little chain for newbies or those in need of refresher on the basics (originally posted about month ago)

The pitombieras project is a district of vanadiferous titanomagnetite (VTM) deposits. As name suggests VTM deposits contain iron, vanadium and titanium dioxide.

VTM deposits vary considerably between each other. Once mined the ore is crushed into small particles some of which are magnetic and some non magnetic.

The proportion of magnetic and non magnetic particles can vary considerably between deposits as can the grades of the commodities within them.

The article below will help explain this well.

https://smallcaps.com.au/investors-guide-understanding-vanadium-deposits/

The composite make up and grade of the VTM deposit will dictate to a large degree how it’s best monetized.

The Pitombieras composite make up can be found in the 26/9/19 RNS and is approximately 60% magnetic particles/40% non-magnetic.

The magnetic particles grade 95% iron ore and 1.25% vanadium.
The non-magnetic contains 33.75% Tio2 (ilmenite has Ti02 content of roughly 50% its approx 67% ilmenite)
The above can also be seen on page 15 of current company presentation with grade comparison to other VTM deposits on page 20.

The commodities that Pitombieras stands out in grade on are Iron ore in the magnetic ore and Titanium Dioxide (ilmenite) in the non magnetic ore.

What are the commercial implications of pitombieras composite make up & grades?

Well we’ve already seen the implications for the magnetic concentrate of iron & vanadium that makes up 60% in the current PEA. The high Iron ore content (95%) provides the option of a saleable concentrate without the need for complex processing. Just mine, crush and put ore through a dry magnetic separation unit. No need for water, acid or heat. This is why a low Capex operation is possible.

For the magnetic ore concentrate we get close to iron ore spot price for each tonne with an additional $30 for the vanadium (based on vanadium pentoxide price of $6.25 per lb). Credits from iron and vanadium mean we aren’t reliant on the price of one commodity and should be profitable at all times in the pricing cycle, exactly what a district scale play needs to be.

What the current PEA doesn’t currently include is monetizing the 40% of the ore that is non magnetic containing 33.75% Tio2 (approx 67% ilmenite).

The non magnetic ore in VTM deposits is often a liability. Operators using a standard wet magnetic separation process will have to maintain tailing dams. Pitombieras on the other hand has highly valuable Ilmenite within the non magnetic ore. So instead of being a liability the non magnetic ore is actually significantly value adding, in fact it should be more valuable than the magnetic ore covered in Q1 PEA.

Jangada for dummies part 2

Ilmenite is more often known to UK investors from minerals sand operations such as Bluejays (JAY) or Capital Metals (CMET), both of which have great grade and decent looking projects. Mineral sands though come from eroded hard rock ilmenite deposits and as such becomes diluted.

Pitombieras has high grade ilmenite for a hard rock deposit and as such grades are multiples of even the best mineral sands as demonstrated below.

Jan non magnetic ore circa 34% Tio2 grade
CMET mineral sand circa 13% Tio2 grade
Jay mineral sand circa 6% Tio2 grade

The extremely high grade Tio2 content at pitombieras also means upgrading it to a pigment grade product of 99% purity is much cheaper. This is a route being pursued by a number of companies with hard rock deposits due to the pricing (ilmenite currently near $310 per tonne, pigment grade $3,100 per tonne).