Member Info for Dcat80

At current prices it really wouldn’t take high grade rhodium to be a decent bonus. Opex in the PEA wac circa $17 per tonne dirt. With rhodium now about $100 per gram even those with basic maths can see being able to recover just 0.17g per tonne rhodium would cover the the Opex!

S Africa raises electricity prices, but not to the level the power supply company wanted to address years of underinvestment. Higher prices, still potential for power cuts ??

https://af.reuters.com/article/idUSKCN1QO1SQ

I’ve mentioned before the importance of S Africa as a producer of 70% of platinum and 30% of palladium. Quotes in the below highlight the concerns of investing in S Africa. Our project being high quality and outside S Africa is a real bonus and should not be underestimated

https://www.bloomberg.com/news/articles/2019-03-05/south-africa-gdp-growth-slows-in-fourth-quarter-on-investment

I ran a few figures when palladium was $45 per gram- see below. Today’s price is circa $48. I’m not an expert though so my thoughts might not be right, happy for those with a better understanding to correct me!

Palladium at $45 per gram. Grade 1.31g palladium equivalent so $58.50 per tonne.

Opex in pea was $17.31 so over $40 per tonne free cash flow

Processing 2.2mt per year as per the PEA = $88m free cash flow pre-tax

Against capex of $43.9m

IRR of over 125% seems likely.
NPV at 7% discount I calculate at circa $572m over a 10year mine life. This is driven by increase in metal price since PEA. We don’t know what metal prices might be in the BFS- will use various forecasts so my $45 per gram is probably on the high side.
If the option with the increase in resource is just simply to double production then o think you you can double the NPV, however than means more plant (capex) which may affect the IRR (could go up with efficiency savings, could go down if more specialist machinery is required).

Euclid55- you part answer the question in your second post. The Brandon Hill $417m is not an NPV calculated figure, but a very simple 10% value of the metal currently in ground. It doesn’t factor in any costs, it’s just a very quick way of potentially valuing the deposit.

To calculate NPV you’d need to forecast annual revenue minus costs, apply whatever discount per annum over life of mine and total up the figures. The main driver for improvement in the NPV would be from higher margins from metal prices increasing and either a longer mine life from the increased resource or processing more Ore per annum as there is a larger resource to get through.

Platinum now at 6month high

China - at times it’s just worth taking a break rather than getting wound up and overthinking things. Either you believe in the project and management and accept they’ll always be something tripping up the project, but overall a good move in the right direction is being made or you don’t at which point you move on. I’ve teased a little about the change in tone on this board in the last few weeks, thing is as prudent investors we need to be aware of both problems and additional positives but it’s best to let it soak in rather than let it hit you hard and emotionally. I post rarely compared to most, but I’m better researched and am very confident this will be a great story

You do say stupid things at times China! If the company doesn’t need to raise cash of course the only way would be to buy current shares. Family offices have less restrictions on what they’ll buy than institutions who usually have rules about only investing in companies over a certain market cap - some $50m, more $100m. We’ve just got to that market cap first and show much more potential and non PI money will buy on the open market. The plant, monetising Casa and Sturec and a significant number of decent drill results (ideally a good jorc) will all play part in getting there. Here’s the thing though, you have to have some patience and manage to wait without going all crazy whilst it takes time to happen....

Strikes extending to 15 miners in S Africa.

https://www.sowetanlive.co.za/news/south-africa/2019-02-22-south-africa-mining-strike-to-spread-to-at-least-15-firms--minerals-council/

I wouldn’t pay much sway to the mood on this board. We’ve swung from too slicing at 5p, to it’ll be a £1 to I’ve misgivings about my investment in little over 2 weeks!

Last month kaliba was our main target. Today I see complaints that we don’t hold 63% of target number 3.

If you want to find reasons to be negative you always can. My opinion - look over a longer period than a day or week.

So the strikes begin. Union president threatens to shut down whole S Africa mining industry. S Africa produces 70% of worlds platinum and 30% of palladium for which there are already supply issues.

https://www.iol.co.za/business-report/companies/lonmin-braces-for-amcu-strike-after-receiving-notification-19426400

2014 strikes went on for 5 months

On 15 November 2014 workers at South Africa's major platinum producers – Anglo American Platinum, Impala Platinum, and Lonmin – went on strike demanding that wages be immediately doubled. However, after five months of striking they settled for a more modest pay increase spread over three years. It was the longest and most expensive strike in South African history.

Calls for strikes in S Africa PGM mines. Whether this comes to anything the unions are due to renegotiate wages this year, last time this occurred there was plenty of strike action. 70%+ platinum and 30%+ of the worlds palladium comes from S Africa.....

SA's platinum producers are due to start 2019 wage negotiations with unions. The existing contracts were signed after Amcu held the longest platinum industry strike in 2014.

https://www.businesslive.co.za/amp/bd/national/labour/2019-02-19-amcu-threatens-to-shut-down-coal-gold-and-platinum-sectors/#click=https://t.co/AWAKf1wdum

Samples were probably already at the lab that’s been taking their time, unreasonable to think we’d get them out of that lab and into another

He said we’re taking to another lab. Certainly hope we use them this next coming campaign

But China you can’t provide a jorc without assays and they’ve been delayed well beyond any sensible buffer zone you’d factor in. Believe company are now working in that jorc, but it won’t inclufe all the drilling data originally hoped for bloody frustrating but what can one do?

China - we’ve been extremely let down by the assay lab which has certainly had a knock on affect. Been clear for a long time that no jorc would be provided for a time, I’ve commented as such a few times.

That doesn’t excuse the plant delay though which seems to be heading to a 2month delay. Up until late November we were still being told December. I’m not expecting huge revenue from the plant with current cobalt prices near 2 year lows so it’s not hugely important but the delay and silence is frustrating.

Any asset sale or JV takes 2 to tango and so no definite timeline can be given on that, all we know is there is interest and the company are trying to progress. Personally I don’t think we’d want majors anywhere near the main targets yet, far too early and without a decent amount jorc resource on the book we’d get screwed royally on any farm in agreement

Fulmar -I find some of the comments on here today disappointing to say the least. Mumena is a throughly decent chap who has been instrumental on Zamsort retaining the licence over the years and in taking things forward with Arcm taming majority control. Any suggestion that now he is on the BOD he’d have provided insider information is both slanderous and racist. Quite frankly I’d love to see Arahim attend the next shareholder conference and to restate such comments so we get s demonstration of how the Chinese that weee after the licence were treated!

Asset sale would have been far better, but the dilution is better than the terms we’d have got from a major at this stage. Should support a 20-25k still programme and with what was done last year to hopefully a jorc of about 200mt

Chin up China, way you’re feeling well be calling you Feeks mark 2 later in the year!