Member Info for southwesterner

"Everything aside from the massive jump in SP, squire.
If you have been invested in this share as long as you have been ****ging it off, you would probably be a bit more cheerful. You come across as quite upset and, bluntly, rather rude. Manners cost nothing.
Cheer up, boyo, as they would say in Dolgellau."

Did you really read my posts? Did you read my buy recommendation on 1st October 2020? I predicted this share was significantly undervalued which is why I bought into it personally and stated as much.

"Having completed my re-modelling of the project economics a few days ago that I posted that I was doing on 14 Sep '20, I have been impressed with the potential here, and have bought in."

I bought in a significant holding then, and I've made quite a bit of profit thanks very much! So I'm very cheerful. Maybe you should read the posts more carefully and not jump to conclusions.

"Is the same poster who stated Labrador & Grangesberg had no value and wouldn’t restart...and as we have now passed your 5p prediction (how dare we) we need to sell our shares to ensure we we get under the 5p"

To be clear, I bought in at 1.5p, and have banked a lot of profit at 7p, but I'm still holding some shares, as I think there is a chance we could rise a bit higher - but based on the higher range of possible PEA outcomes. If you actually read my posts, you'll see very clearly that I never said that the iron ore assets "had no value", I actually said - and I quote "I've already expressed my opinions on the value of the iron ore projects earlier, probably worth ~£1-2m in current market conditions".

This was 2 months ago, and the iron ore price has risen considerably since then, so the "market conditions" have improved. Furthermore even in these new conditions, and with a PEA underway at LIM, our share of LIMH as a company if we wanted to sell our stake tomorrow is just £0.8m... see https://finance.yahoo.com/quote/LBRMF/

I think if the iron ore price sticks around $140-160, and if LIM can secure offtake financing, then yeah we could be looking at LIMH going up several times, and then our stake could be worth £4-8m. But thats a lot of if's - right now its worth £0.8m. So that hardly proves me wrong on that front...

I'm sorry I'm not telling you what you want to hear. But I thought AYM was undervalued at 1.5p, and I posted Buy recommendations with a target of 5p. Since then metal prices have gone up around the board basically, especially base metals which are the majority of Parys Mtn revenue, and iron ore. But I think even with current prices factored in 7-9p is fair value about right now. Lets see what happens with the PEAs.

So the actual table for operating profits at different iron ore prices looks like...
$30 ----- NEGATIVE
$60---- ZERO
$90----$3,600,000
$120---- $7,200,000

Compare that to your table. And then also bear in mind this does not include royalties, or G&A costs, or payback back the costs of capital funding no matter whether that is debt or prepayment. Perhaps now then you understand why the market doesn't value this at $1.5bn. What is it worth? Potentially something. If AYM can get a couple of million for their 12% stake, and that pays for a PFS and further drilling at Parys Mtn, that would be a strong result. But getting back to 90p on LIM is pie in the sky. In 2011, AYM owned 33% of LIM, now we own just 6% of LIM - that is a fact. And the iron ore asset closest to existing infrastructure (James deposit) has been mined out in 2011-13, and the proposed further development of the Houston project will require $20m+ new capital investment just as a DSO-trucking project (which will have relatively high opex). We will see more details in the PEA.

And then as for all this Gerald Group stuff, yeah sure I think there is a possibility they would be interested in selling the iron ore and they have had a disaster in Sierra Leone. But, the idea that they have set up a $300m financing for LIM operations is fantastical. You are piecing together 1+1 and getting 5. You posted;

"You think this any coincidence
https://www.prnewswire.co.uk/news-releases/gerald-renews-north-american-borrowing-base-credit-facility-with-oversubscription-865372282.html "

And then you posted...

"Relevant----- https://www.prnewswire.com/news-releases/ing-leads-syndicated-financing-of-300-million-for-gerald-group-300933752.html
They do this. Labrador announce PEA"

Maybe look a bit closer at the date of your second link. Its October 2019, not October 2020. This has nothing to do with LIM. Gerald Group have done a syndicated refinancing every October for their North American trading hub, going back to at least 2017. This is a working capital facility for trading iron ore, not for building new mines. I'm not saying Gerald Group won't finance LIM, but its not "in the bag". If the market believed LIM was a sure bet capital funded for a restart, they wouldn't be valued at C$14m; https://finance.yahoo.com/quote/LBRMF?p=LBRMF.

So one can only conjecture logically that either LIMH is massively undervalued - by at least 10x, just to get to our current levels of valuation at AYM - or the majority of the increase of the market valuation of AYM is based on expectations for the Parys Mtn PEA. I speculated before that one could justify a share price of 5p based solely on the Parys Mtn PEA, but we are now in excess of that, and I think we need to wait to see what the PEA brings us before this justifies any more value.

Some people here are totally off their trolley. Unfortunately every day now we are seeing new heights in the peddling of utter rubbish to try to push this higher.

$1.5 bn for LIM someone mentioned earlier? Now you can't say much with any certainty in mining and commodities, but I can absolutely guarantee that is never going to happen. We'll be mining iron ore on the Moon before someone pays $1.5bn for LIM.

I'm not an expert on iron ore at all, but really people are getting ludicrously carried away here. LIMH is already a traded stock in its own right. And the market is valuing LIMH at £7m currently. AYM owns 12% of that, so the market is valueing our stake at under £1m. So unless there is a massive disconnect between the valuation that AYM is giving LIMH, and what LIMH Is valued at (in which case you should buy LIMH) then the vast majority of value in AYM is attributed to our other projects. Even if LIMH went up 10x to be worth £10m, it would only acccount for 2/3 the market capital that AYM is valued at now (£15m). If you really believe LIMH is going to go up 10x, you would buy shares in LIMH - not AYM who are only leveraged to 12% of them...

As for Boom123, and I dont know how many times he has repeated this...

"AYM hold 12 % of LIM .
On stated 2 mill tonne production thats 240,000 per annum to AYM .
So ... at
$30 ----- $7,200,000
$60----$14,400,000
$90----$21,600,000
$120---- $28,800 000 ."

Lets set the record straight. Firstly, and crucially, LIM Holdings (which is what AYM own 12% of) only own 51% of LIM - its on the home page of their website if you care to look. So we actually own 6% of the LIM iron ore assets. So you can halve those revenues straight away.

Secondly, they are revenues, not profits. Revenues dont get "sent" to AYM, AYM doesn't have the right to have the iron ore coming from LIM anymore than shareholders of Rio Tinto do to theirs. AYM will only see their share of any profits after corporate and operating costs are fully paid, and after the projects capital costs are paid off. That means you have to remove operating costs from the projections to start with. Boom123 said "extraction costs a lot cheaper than years back as low as $15-20" - I mean that is an absurd statement. If that was the case, the Houston project would have been developed many years ago. The truth is extraction costs will be around $60/tonne. So if the iron ore price is $60/t, no AYM's stake in LIMH is not making $7.2m per year - its making nothing.

So taking all that into account, lets make a projection. If the iron ore price stays at $120/t next year, which most commodity traders would say was optimistic and presumably you agree because its your highest price scenario, then this mine could generate $60/t profit (not including royalties/G&A costs etc). At a 2 million tonnes production thats $60m profit for LIMH as they own half the asset, or $7.2m to AYM. 1/4 of your number.

"Mining engineers like SW are similarly trained in the economics of the business and viability of projects. If he’s watching these Punch & Judy exchanges between rampers with their tales of Eldorado he’s probably reluctant to muddy his hands in contradicting their wild exaggerations."

Haha! Yes well look, I'm long on this share too, as I said before I have a significant holding purchased at 1.4-1.6p back in September, so I'm not going to complain too hard about the ramping, I want to see the share price rise too! Equally I don't want to create ludicrous unrealistic expectations, cause then there's a risk of disappointment at reality leading to a sell-off. I'm pretty confident there is value here, and I've already given my predictions of 3-5p post-PEA. Thats seems sensible. Or you can hang your hat on the yacht and sunglasses club - and get rich quick.... look they're mainly paid rampers still trying to shift the overhang of options - and once thats done they will disappear off to the next job. Hopefully soon!

I also think generally people are getting wildly overexcited about a 12% stake in a project (LIM) which is currently capitalised on the TSXV at £4m - so thats worth £0.5m on the market. Hopefully we could see that go up significantly on a strong PEA, but its never going to create a "10 bagger" in AYM, or any of this nonsense. Every time LIM goes up - and its a very volatile small-cap share, they are shouting it from the rooftops, every time it falls they don't mention it. You'd think reading the comments here its up 10x in the past 2 weeks - its actually down 30% in that timeframe. Look, if LIM is really so damn good, go and buy LIM. Why would you expose to just 12% of the asset if its that amazing. AYM is never going reach 90p again on LIM like in 2011 because back then we owned a 40% stake, and LIM owned DSO assets with existing infrastructure, in production. Those assets were given off to creditors when the company was almost bankrupted after the last failed production run. The assets LIM has now will require significant capital to put into production, we will see more details in the PEA. Hopefully some value here, but I think to bank on LIM to create a "multi bagger" in AYM is naive. Even if it was up 10x and valued at £40m, that would only be worth £5m to us. Best case scenario for LIM - the PEA is positive, LIM shares go up 3-4x - and we can sell our stake for a couple of £million to fund a Parys Mtn PFS. Food for thought : If Bill had sold the LIM stake in 2011, we could have net £50m or more, and put Parys Mtn into production with the proceeds which would have created £100s of millions of revenue since then... instead we're worth £5m.

Sold out my small holding here earlier for a small loss, more than made up in AYM trading today. Total loss of credibility for the SML BoD, significant doubts really now after the past few RNS's - they are just totally unrealistic. They aren't going to be able to sell Redmoor for more than they paid. And now they can't seem to get any debt so they want to fund LCCM with an IPO on the ASX... how much of LCCM will shareholders be left with after that? Still 40% of something is better than 100% of nothing, but is this really floatable with the current level of detail? They are also claiming a reduction in the start-up capital, yet if you read the original economic study RNS from 19th November 2019, it was US$1.75 million then. Now its US$2.2 million. On what planet is an increase of $0.45m, a reduction? Todays RNS basically says they missed out the prestripping costs at Paltridge North the first time around, and if you take that off the $2.2m you have only $1.6m so its a reduction...? I mean what?! Its just abject nonsense and this whole economic update seems to have been done on the back of an envelope. I'm sure LCCM could work out in the end, but given what a botch its been to date its equally possible it won't.

"how treatable is the ore? how does the recovery compare?"- 90% average recovery on base metals from basic 3-stage flotation, or 85% with pre-concentration by DMS. Considerably better predicted recoveries than for Redmoor overall. Flotation of sulphide ores is a well proven standard technique, gravity processing for tungsten/tin can be more tricky in terms of execution, even though the principle is simple enough...
"Is it cheaper or more expensive to process than the Redmoor ore?" - looks like similar costs overall
"is the capital cost of the processing plant more?" - not clear from available information as no cost breakdown for Redmoor, but looks like Redmoor processing plant probably has higher capital costs.
"the flip side of large deposit is you need larger mining equipment, which increases the capital cost there?" - well, the deposit is a similar total size, but it has much greater width, which means you can use larger equipment without dilution. 3x 30 tonne trucks will be more expensive to buy and run, than 2x 45 tonne trucks.

Looks like these warrants are going to weigh down the price in the run up to the PEA, given there are 12.5M of them in total, and only 2.5M have been exercised yesterday, so 80% of them remain. I still feel if the PEA results are strong enough it will erupt through the effects of the warrants and make 3p+. Possibly before then too if there is enough interest, but some way to go.

Also explains the recent twitter "ramping" operation which has occasionally extended to this message board. As I said before, on 7 Sep '20; "This is a social media operation to shift these shares. Same as Stratton Oakmont, but they don't need to ring you up any more, they can just do it online!" Obviously that extends to monetising the warrants as well as placements.

"How does Redmoor compare to say Parys Mountain (AYM) which is 10mt at 5% grade"

5% grade of what though? Copper, zinc, lead, iron? Parys Mtn is a mixture of several metals as it happens; zinc, copper, lead, gold and silver. You can't just compare one metal grade to another directly, they are have different values. To put this one to bed once and for all... I will convert both Parys Mtn and Redmoor into a "copper equivalent" grade... based on current metal pricing and recovery estimates, from industry data and previous press releases etc.

Parys Mtn is "up to" 10Mt mineable resource at 2.07% copper equivalent (pending 2020 Micon PEA)
Redmoor is 7.2Mt mineable resource at 2.04% copper equivalent (2020 WAI PEA)

Couldn't believe how close they ended up to each other.... quite a strange coincidence... counts in Parys Mtn favour to be honest, because its an easier to mine deposit on the whole (more favourable dimensions = less development metres per tonne), conventional flotation processing, and based on less historically price volatile metals. Equally, tungsten has a strategic element to it, and arguably is at a low point in pricing, so that could count in Redmoor's favour going forwards.

"We need some expertise please on here to contextualise our Redmoor Asset. The BOD tell us that our 11.7mt at 1.17% is world class? Is that the case?"

Redmoor is a globally significant deposit, and the economics are fair, especially when using higher prices like in the Study. I also think some confirmatory and extensional drilling on the highest grade parts of the deposit are well justified even in the current economic climate, as more high grade material would further improve the economics, and given the outstanding success of the last campaign there's good reason to think there is more to come. Obviously that is only likely to happen when a financing solution for LCCM is found.

However, Redmoor isn't a significant tin deposit, and just calling it so, and converting the grades to "tin equivalent", doesn't make it so. If you look at the material they have put into this mine plan: 7.2 million tonnes at 0.59% tungsten trioxide, 0.10% tin, 0.39% copper - the revenue streams on the metal prices used in the Study are approx 75% tungsten, 10% tin, 15% copper. No point keeping talking about the tin market and how great it is, battery metals and all that spiel, or how few tin deposits there are - cause they ain't one of them. But nonetheless, the truth is, this IS one of the highest grade large-scale tungsten deposits in the world, with potential for further expansion, so its definitely "world class".

"A post on here yesterday (subsequently deleted )said that the NPV of $85m did not stack up and the mine was uneconomic at current metal prices. Is this a fair view or is this nonsense? How does our mine compare to other developing mines? What is a decent NPV and IRR? How does Redmoor compare to say Parys Mountain (AYM) which is 10mt at 5% grade; It also has a mine shaft sunk."

The NPV and IRR are attractive at the metal prices used in the Study. Obviously what metal prices you use has a big impact in any Study, its usually the key variable. I don't think the project is "uneconomic" at current metal prices, but its certainly less attractive, and further optimisation or exploration is required to progress the project based on the delivered outputs - in current market conditions. There is no such thing as a "decent" NPV really in mining, as that is basically just the overall "value" of the project when discounted for the cost of capital and time value of money (8% per annum in this case), so it just depends entirely on the scale of the project. So a massive porphyry copper project might have a $1 billion NPV, and a vein copper project a $50m NPV, but the latter would get financed and not the former, if its IRR is superior and the perceived risks lower. A decent IRR might be 20-25% at current metal prices, a strong IRR would be 30-40%, and anything over that is like printing money. As for the mine shaft at Parys Mtn, its fairly irrelevant as modern mining is conducted from a ramped tunnel (decline) at the depths of these projects.

Well, the port of Lulea on the Gulf of Bothnia is now open for shipping all year according to their website; http://www.portlulea.com/60/in-english.html But you wouldn't need it because the iron ore pellets from LKAB (Malmberget or Kiruna) can just be railed directly to the SSAB blast furnaces (which are in Lulea and Oxelosund).

I don't think Grangesberg was/is a bad investment as it cost AYM next to nothing, and so even if its worth next to nothing, they haven't lost anything on it. And like I've said below "who knows", one day it might be worth something, recent events are moving in the right direction for sure, but you've really presented zero evidence other than parroting the sales pitch that was given back in 2014. It just feels like you are trying to push a narrative here when there just isn't one... certainly not a convincing one.

I mean the other aspect of Grangesberg is that some private equity company that knows a great deal more about the state of the European iron ore market, and the logistical benefits of production in Europe, than you or I - might decide it makes sense. Like for instance WCM's coking coal project in Cumbria. On the face of it, seems totally counter-intuitive and against the grain, the stock market would never have funded the project (over £30m spent on it to this point) - but private equity sees a niche. Grangesberg is just not the kind of project thats within AYM's (or any junior mining companies) field of expertise, thats for sure.

"Re Grangesberg LKAB (Swedish Mine)is coming to its End of life and has recently had seismic issues and the nearest port freezes over in Winter so Grangesberg looks a very attractive replacement"

I mean firstly when you say coming to the end of its life, its got reserves till 2035, although the seismic issues could reduce this possibly. And the thing about the port freezing over is a complete nonsense. Iron ore has been exported from Kiruna to Narvik (ice free port) on a purpose built railway line for over 100 years, on the imaginatively named; https://en.wikipedia.org/wiki/Iron_Ore_Line - and that will no doubt continue.

I've already outlined in a post on 14 Sep '20, that the capital costs per tonne of additional iron ore concentrate capacity for Grangesberg are very high compared to most iron ore projects on the market, and for that reason alone it may never be economically attractive. The scale of the project is probably also too small compared to LKABs existing operations - it couldn't replace Kiruna mine because its 1/5 of the size (in planned production rates and resources). Then furthermore, Grangesberg is at depth under existing pre 1990 iron ore mine workings, not as deep as Kiruna, but its still a depth extension beneath existing workings. LKAB also has a pipeline of existing resources; https://www.lkab.com/en/about-lkab/from-mine-to-port/exploration/mineral-reserves-and-mineral-resources/

Who knows. Its not impossible they might decide they want Grangesberg, but I doubt they'd pay too much for it. To try and ascribe any value to this project now would certainly be extremely speculative, and to call Grangesberg a "very attractive replacement" for Kiruna - well thats just outright fabrication.

" lets not forget this is a mine that has been inoperable for the best part of 60 yrs,start up/pe-production cost will be enormous and it will be many years before such cost are recovered. Even with the predicted life span of up to 18 yrs when the sums are in it may not look a viable option for some."

The market has changed a lot in the past 60 years, this is looking a better prospect now than ever before in my opinion in terms of where this project fits into the market, with strong precious metal credits, and the suitability of the orebody to the application of modern mining methods. Capital costs will obviously be significant for the full scale operation - possibly approaching $100m, this isn't going to be a small operation, but compared to other similar projects it could actually be very attractive. Whether the lifespan is 8 years or 28 years isn't going to bother the market or potential funders, all that matters is how the returns on investment stack up.

"We're all getting excited and rightly so but lets not get ahead of ourselves everything is still in the ground and looks like being there for some time yet. Speculators will make money with the minor SP movements but any real money is not to be had at this point in time.Talk of SP between 5-10p is wishful thinking "

Yeah Im not in the the "10p by the end of the month" club. I think 3.5-5p is achievable though before the year is out, as there is a tangible goal (the PEA) for the first time in a while - and I have good reasons to believe from my modelling that it can achieve impressive results far in excess of the 2017 Scoping Study. From there how we move to the next step is another question, but if the share price is up towards 5p, there's potential to raise some money to progress to PFS without massive dilution.

"If Micon have now got to evaluate QME's work what was the point of QME in the first place and why didn't Micon do a better job with their studies?"

QME have done a lot of the legwork and done a lot of time consuming economic modelling and mine design work for no cost, using relevant cost information that is probably more applicable than what Micon have. Sometimes a fresh perspective from people at the sharp end of things is useful too. A lot of the senior consultants have been off the front line for a while. As for why did Micon miss these optimisation opportunities first time round... thats a fair point. I find that Consultants tend to put together the easiest/most obvious mining plan, not the best one, most the time. They wont try out lots of iterations, to find the optimum option, unless you pay them a lot more of course. In this case they've completely missed the potential of the White Rock Zone to be mined at a larger scale.

"As for Grangesberg that's a none starter,again dormant for 30 yrs and there are more readily available sources of Iron Ore in the world, enormous operation in Brazil and Australia move more in one train load than Sweden's total ore output for all of 2019."

Whilst I agree Grangesberg is probably irrelevant, the one train load thing isn't quite true, Sweden produced 37Mt of iron ore in 2019. Heaviest iron ore trian in the world is Western Aus, and it was 82kt of iron ore. So yeah Sweden is a significant iron ore source for the European market, but yeah your right the scale of operations in Brazil and Australia is enormous.

"Can you give us the companies you are benchmarking of so we can compare with AYM"

Start with some VMS deposits;
Venturex Resources Ltd - Sulphur Springs (Western Australia)
Ascendant Resources - Lagoa Salgada (Portugal)
Constantine Metal Resources - Palmer (Alaska, USA)
Wolfden Resources - Pickett Mtn (Maine, USA)
Foran Mining - McIlvenna Bay (Sask, Canada)

I'm benchmarking against projects in some of the most attractive jurisdictions in the world (according to The Fraser Institute Annual Survey of Mining Companies 2019) to come up with that valuation, so we're talking about Canada, Australia, USA, Western & Northern Europe etc - not "deepest Africa". No point arguing though, we'll see who was right I guess in a couple of months hopefully if the PEA is released on time! (which would be an AYM first but lets not get into that again)

"That's all in the report just published which confirms a significant uplift!!"

The QME report doesn't *confirm* anything and it wasn't published. It's just, and I quote, identified "potentially mineable material available" of "up to 10 million tonnes". The economic results of the study cannot be released publicly to the market because it wasn't carried out by a competent person (under the JORC or CIM codes). Its up to Micon to confirm whether the potentially mineable material is correct, and to check the economic modelling behind it, hence the PEA being commissioned.

Yeah thats right honestbob, the figures are just for cash (operating) costs, they don't include any royalties, or the cost of capital. A 4% NSR royalty is payable on all gold and silver to the Crown Estate. Most of the resources in the mine plan are in the western part of Parys Mtn, in a freehold mineral license, however a 6% net profit (after depreciation costs) is still payable on that. Anything on the eastern lease has a 1.8% NSR royalty on base metals.

It's all fairly academic though, unless the project has strong enough economic modelling to obtain terms of finance to build it, the market is going to value the project at a tiny fraction of its projected asset value, so bandying all these big numbers around as if they are somehow directly linked to the market valuation of this kind of pre-development project, is fairly pointless. That is never the case with junior mining companies until there is a clear path to production and financing in place, which is not the case here yet. I think we really have to wait for the results of the PEA before conjecturing much further, Micon might have a much more conservative view of the modelling than QME. Nonetheless, there is clear potential for the PEA to show significantly better results than the 2017 Scoping Study, and from there a market valuation for the Parys Mtn project in the £10-12m bracket would be sensible based on benchmarking of other resource projects.

Remember AYM also has £4m of debt which will come off any valuation. Talk of 10p + is basically a fantasy. I've already expressed my opinions on the value of the iron ore projects earlier, probably worth ~£1-2m in current market conditions, so overall share price target 3.5-5p post-PEA. Definitely worth a punt at current prices.

Just taking the NSR of the 2017 Study, dividing by the tonnage of 2.1Mt, to get a NSR value per tonne of $130, and then using current metal pricings to convert the metal equivalent grades from the old resource grades to the new one, thus giving a value of $80 NSR / tonne for the new 10Mt resource... and therefore, $800m total NSR. It's not perfect, but its going to be fairly close.

$800m NSR is great, its 3x as much NSR as before. But remember also there is 5x as much ore to process! Every tonne of ore will still cost... say $40 to mine/process, so you're looking at...

$800m - ($40x10Mt) = $400m profit
Against the 2017 Study...
$270m - ($47x2.1Mt) = $170m profit

So in terms of profit... we're at 2.4x the Scoping Study in terms of profit, and because its contained within 5x the ore quantity, the production rate will need to be at least doubled to retain a decent IRR/payback, which means more Capex. So we're probably looking at $70-80m capex instead of $55m. It's still going to be a good outcome, but its not a case of printing money and a lot of the predictions about "5x asset value woah!" is just baseless hype. The asset value, or NPV... is probably going to be 2-3x what it was before in my opinion. The critical factor is whether the payback can also be improved, and then we might be looking at something the market could be interested in funding through to a Pre-Feasibility Study in 2021*

*I mean the actual $2m or so required to conduct further exploration (to bring more resources to indicated status), processing testwork and other technical studies on this project to bring it to a PFS level, not just day trading hype.