Member Info for Dcat80

Chain of tweets including slides which can’t post onto lse. Any questions just shout

https://twitter.com/davidca041980/status/1309418563241938945?s=21

Tex- It’s the first time a chemical plant has been mentioned in plans and as you’d know that’s huge from my point of view. It sets out the plans to produce quicker than most projects would allow - first time we hit any confirmation of that was in the resource RNS. I think it’s a good updated presentation. Trial mining application with and 3rd party discussions are undoubtedly taking place, but I doubt will be mentioned until they’re buttoned down as opposed to giving us false hope (you can blame just me if it’s not the case ;) )

Tex- did ponder with a friend whether producing new presentation covering 1st stage drilling and plans to move to production (what PEA will cover) was something they wanted to do before releasing a new wave of news. Fingers crossed that’s the case and some of the news we’ve speculated on landing starts to do so soon. If company dies want those 6p warrants converted they expire 15th October and we’d need to be well north of that to provide incentive for converting.

Most mining operations will only have a small percentage of actual metal within say a tonne of dirt. You wouldn’t pay to transport a tonne of dirt for example if it contained just 1g of gold!

As our ore is pretty much spilt between an iron/vanadium magnetic ore and a non magnetic ilmenite ore it all has to be transported anyway hence my thoughts all processing could be done at an industrial estate where power and other utilities are already hooked up.

Personally surprised they want to process on site. Probably save them hiring an industrial unit and logistically you’d only have to transport ore from site direct to offtakers (until chemical plant build for phase 2), whereas model I envisaged was transport to industrial unit, then after separating there transport again to offtakers.

If they are using a dry process they probably don’t need to worry about getting water to site by pipes. Could also run a generator as opposed to attaching site to power grid, however generator using diesel would be higher power costs that being attached to grid.

Pedra Branca envisaged $10m of non plant Capex, but that would have involved building a tailings dam which a dry process dies the need, connecting water to site which I don’t think we’ll need and I’m sure power as well which on a smaller operation we might get away with a diesel generator. To be cautious I’d add an extra $2.5m to my earlier estimate on capex so $7.5m-$12.5m. Will be higher if dry process doesn’t work - possibly as much as the $10m PB envisaged, albeit that was for bigger operation.

Off to a wedding shortly (reason in Greece for the week). If you’ve other questions shout and I’ll try and answer after the worse of tomorrow’s inevitable hangover!

BF- it’s up now. They probably sent it to whoever looks after the website earlier and was just with them to input.

I’m at the original Olympic stadium in Athens at the moment. Will look at in detail later. Looking to process at site so will be slightly higher capex than I envisaged, however key is they are looking at a chemical plant at stage 2 which is hope would be the pigment grade tio2 process which will lead to the high margins I’ve been in about since start of year. Excellent to see that being considered as economics should be outstanding!

The table in the RNS is particularly good. It further shows Valore have a great handle on identifying new targets. Their geologists clearly are doing a good job in directing the drillers to the right spot. Frustrating market still isn’t recognizing their progress, however economics always win out eventually. Battle SP wise appears to be due to a weak shareholder register with selling occurring well before Jangada sold some of their shares. At some point though bigger money will pay attention and mop up weaker hands

https://twitter.com/davidca041980/status/1308310099539243008?s=21

Beer = creativity. Has the thought earlier. Whilst trial mining permit will restrict what can be extracted under a licence I wonder if a separate trial mining licence could be obtained for mocidad. Assuming same kind of deposit and grade could we kind of cheat the system and have 2 separate mines feeding plant at an industrial site near the port? I.e. double up our operation if or when capital allows.

Absolutely no idea If possible or not, but what a work around that would be ;)

Think the margins certainly if pigment grade product is part of plans means it’ll be a priority for any party. Whether other parties would have the technology for pigment grade I don’t know, certainly a few methods now but not something any Tom, Dick or Harry has. From memory it’s the latest crux interview with largo in which their ceo said they were being offered debt at extremely cheap rates. Financing risk I think is quite low, however if we need to partner they’ll obviously try and leverage for a higher equity portion of the project. If they take the Mickey though Jangada could much more easily start on the lower capex non pigment route for the first year or two, build up cash and then build pigment plant ourselves (with fodere providing technical assistance)

No worries guys. It’s an exercise I like to try and do just to make sure things like they’ll be good. Not claiming below will be accurate, but it’s what’s available and I’m very happy how it looks.

BF - agreed about your gold comment. The tio2 grade if converted into pigment grade is equivalent to 15gram per tonne gold from surface. If it was gold MC would be many multiples. Ok not so easy to process as gold, but when it comes down to producing and money in the bank it won’t matter!

I’m done with numbers now. Hopefully below set of posts make some sense. As always better understand the rationale and thought process do you can play with numbers how you feel fit. Anything doesn’t make sense then shout and I’ll try and explain

There are no doubt other potential scenarios including use of a fodere plant or copying the Neometals approach of partnering with another company in which concentrate is produced locally then sent off to a JV partner for further work into final high value products (neometals plan is heavier processing gets down by Chinese partner)

Scenario 2 - iron/vanadium concentrate with a pigment grade tio2 product

Anyone following my posts over the last year should know my excitement for pitombeiras comes from the possibility of upgrading hard rock ilmenite into a pigment grade tio2 product.

ASX listed TNG Ltd & TSX listed Largo Resources both plan for this. Jangadas tio2 grade is multiples higher and was crying out for this approach.

Capex for this option will follow scenario 1 above, but then include an additional chemical plant to convert the ilmenite concentrate to pigment grade tio2.

Opex
300k tonne ore @ $73 per tonne = costs of $21.9m
Further processing of 120k ilmenite concentrate @ $150p/t = $18m
Total estimate opex $39.9m

Revenue
Iron 171,000t @ $90 = $15.39m
Vanadium 2.160t @ $7500 = $16.20m
Pigment tio2 40,500 @ $2000= $81.00m

Total revenue = $112.59m

The margin in this scenario is a much improved $72.69m PA. Not bad for a small 300k/t trial mining operation. This would be scaled up in later years

Scenario 1 - Iron/vanadium concentrate and ilmenite concentrate

This is a basic operation producing basic concentrate products, however CAPEX would be cheap at a $5m-$10m estimate

Opex 300k tonne ore @ $73 per tonne = costs of $21.9m

Revenue
Iron 171,000t @ $90 = $15.39m
Vanadium 2.160t @ $7500 = $16.20m
Ilmenite 73,633t @ $125 = $9.20m

Total revenue = $40.79m

The above would produce a margin of $18.89m PA

Jangada PEA - grade, metal prices and revenue

Without doubt the more challenging aspect to consider with various quality of the various elements with different prices.

The metallurgical results were released September 19 envisaging a wet magnetic separation technique. As per recent comms the company are now looking to test a dry magnetic separation process so results may vary slightly.

The Sep 19 metallurgical tests found;

Magnetic ore (iron/vanadium concentrate)
60% of the overall ore
Contained 95% iron ore
Contained 1.2% vanadium

Non magnetic ore (tio2 concentrate)
40% of the overall ore
Contained 33.75% tio2 content

The iron ore Jangada have is referred to as ferric oxide in the resource report also known as hematite. Hematite has an iron content of 70%.

The tio2 material Jangada have is ilmenite which appears to average 55% tio2. On this basis the non magnetic ore should contain 61.36% ilmenite.

Based on a 300k/t PA initial operation the following figures can be used

Magnetic ore
180k tonnes material containing
171k tonnes iron ore
2,160 tonnes vanadium

Non magnetic ore
120k tonnes containing
73.633 tonnes ilmenite (if sold as ilmenite)
OR
40,500 tonnes tio2 pigment grade if processed further

Metal prices per tonne (p/t)
High grade iron prices such as Jangada appear to have is currently circa $135p/t.
Vanadium pentoxide is circa $15kp/t
Ilmenite circa $175p/t
Pigment grade tio2 circa

Prices I’ll use are as follows
Iron ore -$90p/t as expect prices to come down
Vanadium -$7,500. Needs additional processing by offtaker which will also affect recovery rate
Ilmenite -$125 with $50 covering shipping to China
Pigment grade tio2 -$2,000 as might need wholesaler to sell on

The above are all subjective, whilst taking recovery rate off price isn’t the correct method it gets job done and this exercise isn’t about being 100% accurate, but to provide indication of potential economics.

Jangada PEA- size operation & Opex

The logistics study released in November 2019 envisaged 300k/t of vanadium concentrate being produced increasing to 600k/t.

With the vanadium being contained within magnetic portion of the ore which takes up 60% of the total ore this could mean 500k/t PA processed (300k magnetic/200k non magnetic).

It could also be that 300k/t is the total we can extract under trial mining total in which case 60% magnetic ore would be 180k/t PA iron/vanadium concentrate leaving a 120k/t pa non magnetic ore (ilmenite concentrate).

To err on the side of caution I’ll work on the lower figure of 300k/t as most likely case.

The logistics study also stated the cost of transporting 1tonne ore to port of pecan free economic trade zone as $36 per tonne.

The NI43-101 report envisaged total costs of $37per tonne ore processed.

From the above we estimate it’ll cost $73 per tonne ore to transport and process it into iron/vanadium concentrate and a separate ilmenite concentrate.

Upgrading the ilmenite concentrate further into a higher grade tio2 product (ideally pigment grade as Largo plan) would incur additional Capex.

Whilst Largo have not released any cost for guidance we know their tio2 content is 13% and they’ve stated will be very profitable.

ASX listed TNG Ltd have however provided guidance on Opex to process their ore which produces a pigment grade tio2 product. The opex figures they have published in economic reports is circa $150 per tonne including mining, milling and transport.

Being conservative we could use an additional $150 per tonne ore on top of the $73 mining/milling/transport costs Jangada have published as some form of guidance. Obviously this additional opex would only apply to the non magnetic ilmenite concentrate ore.

Whilst I’ll consider grade, revenue and margins later those aware of current iron ore prices and Jangada iron ore grade may pick up on one obvious point. Namely on a concentrate only operation Jangada iron credits would cover all opex at current prices with vanadium and ilmenite being free cash flow..

Looks like MMs are trying to keep us level. If looking to buy and you put in a fill and kill order then MMs have to agree upto 30k shares on the Jangada book at the quoted price (currently 3p).

If you watch the largo presentation that Swizz posted earlier the slide is from there. Worth it just for the comments on tio2, although I’ve covered this more than a few times!

I’ll aim to put data on opex out tomorrow and reference the 300k/t PA trial mining licence is suggested as allowing in the logistics report. Then Friday some revenue figures. That’ll be the hardest part by far, thinking I’ll just have to guestimate 50% of the vanadium value to cover recoveries and offtaker taking their cut. At least the iron and tio2 product options should be easier

Tex- been writing notes up in the evening pre beer. Sunshine, relaxing and beers can wait until I’m in Greece next week ;)

As it’s a photo easier to just post link to twitter post here.
Similar to a fodere plant, can’t see any reason why we couldn’t upgrade our ilmenite ore to pigment grade ($2500-$3000 per tonne). Obviously if largo partner on the project they’d be keen for maximum returns and I’m sure would be supportive of this as well

https://twitter.com/davidca041980/status/1306285308858765314?s=21