Member Info for southwesterner

Did you read my post at all?...

I dunno how I can be any clearer: they are probably going under.

"Recovery rates during Q4 were adversely impacted upon by excessive wear and corrosion of parts in the plant, the quality of available ore and the amount of clay fines which saturate the thickeners and reduce throughput as well as a number of mechanical issues"

This tells you everything you need to know. They don't really have a clue what is going on. Wearing components and corrosion? Mechanical problems? Clay? How much of a factor is each excuse? Its Wolf all over again. If they are unable to provide real quantifiable facts or graphs/information of what is going on - its clear they don't have a real plan to fix the situation. You are at the mercy of the CEO's meaningless promises of "expecting" things to improve. Maybe they will, maybe they won't. But time has almost run out.

Meant to post this link referencing the planned production levels, not todays RNS; https://www.lse.co.uk/rns/WRES/financial-investment-decision-report-debt-update-anczjj23amzvc1u.html

Also this presentation from then is well worth a look;
https://www.rns-pdf.londonstockexchange.com/rns/0702P_-2017-8-25.pdf

Credit to GUG for calling the way this was going, a long time ago, despite all the people giving him crap about it. WRES has been treading water trying to stay afloat for years, but without delivering meaningful results. Jam tomorrow, but tomorrow never comes. Never mind "vertical startup" this thing has never got off the starting blocks...

https://www.lse.co.uk/rns/WRES/production-report-and-finance-update-dd5cpzik2wzg6nh.html

Look there, when this project was sanctioned it was going to "produce approximately 2,700 tonnes (“t”) of tungsten
concentrate and 500t of tin concentrate per annum" at 2Mtpa - pre-expansion to 3.5Mtpa. Last quarter was 13% of that level, and their best ever quarter was 24% of the predicted annual production. And this is over 3 years in...

The Plant doesn't work, its that simple. They are unable to explain precisely where they are incurring losses and what they are going to do about it, same as Wolf Minerals couldn't. They are improving it, but very slowly, and its two steps forwards, and one back. Two back this quarter. So investors are putting their money on the table in blind faith that the management team know what they are doing. Does that really seem sensible when they keep failing to meet their own targets? The Plant probably needs redesigning and restarting from scratch, aka. WLFE Mk2. Incidentally, I called this project "WLFE Mk2" in a post in September 2020.

Let's be honest, for all the people talking about a turnaround and waiting for the next set of results - there probably isn't going to be a next quarter. This is going under, unless they can find someone mad enough to invest in a management team that consistently overpromises and underperforms, and that has poured $millions into something that still doesn't work.

Its crazy they arent printing money at current tungsten and tin prices, which are doing very well indeed - and its very unusual to pull the plug on a project in commodities that are on the ascendancy, but ultimately no price increases are going to sort out a plant that is performing at 13% of its planned metal production rate, which is where they stand now. When Wolf Minerals were sadly going under, I remember a lot of people were in denial that time had run out and the turnaround wasnt going to work.

When the news came in that administrators has been appointed and the shares were suspended, it was a "surprise". If WRES can't secure this debt they are currently negiotiating, the plant will never restart from its "maintenance shutdown" - under this company.

I can tell you with a fair degree of certainty that *evaporation* ponds in Cornwall would result in producing a lot of water, and not much lithium.... so you can sleep easy, lithium mining in Cornwall will never look anything like that.

Yeah... I'm not sure I've ever seen such a big mining project successfully developed by a junior without a partner... Woodsmith is absolutely colossal, biggest individual mine ever built in the UK by a huge margin (not counting Selby complex as one mine). With the longest tunnel in mainland UK thrown in, and fair point MajorOak raised there I forgot to acknowledge earlier, about the tunnel being a planning condition, and the cost of the tunnel being a factor in the overall situation. That said if there wasn't a tunnel, it would still have to be conveyed, you simply can't move that much on our rail infrastructure, and the slurry pipeline plan had too much energy costs in drying. I don't think Anglo have finalised the planned cost of the overall project, nearly 2 years after buying it... but its going to be well over $5bn...

But the other big factor was the commodity risk was too much for the bankers. They didn't and probably still don't understand what polyhalite is and how to value it. Mining projects always have tremendous commodity pricing risk, but having a commodity they couldn't even look up a benchmark price never mind a forecast for, was the nail in the coffin, and the source of a lot of the criticism was about the product. Personally I think its a great product, and it will be a very profitable mine - once its built...

3) - yeah I dunno what exactly BL have done that EMH hadn't done. My understanding is EMH sent samples away to a independent lab which did a one off batch of processing to make a sample of lithium carbonate, whereas BL have actually built the whole process in-house with a processing plant on the edge of Goonbarrow pit. But presumably EMH have also made lithium carbonate from their micas? Anyway the chinese definitely have...

"4. - SXX - they had delay after delay after delay over the first few years. Time costs money. Jumping through those hoops cost money. Changes of the plan added millions because of the that national park. Building a tunnel out of the park to process cost more. By the time they got things passed they had spent too much and couldnt raise funds to get the job done. Bascally , the planning years bust them. Time is infact money on debts. Rio now own it and they have billions. Didnt save the investors of SXX though."

I disagree with that analysis. The planning years did not bust them at all, that was all funded by equity. What bust them was spending over $1 billion on starting construction of the mine, based on $450m of debt (+ some equity + royalty) - which they called "Stage 1 financing". They then planned to have a Stage 2, a couple of years later, where they refinanced Stage 1 and also obtained the other $3bn required to build out the rest of the mine.

Originally they planned to have $1.5bn of commercial debt, and $1.5bn of government backed loans. But the government dragged their feet, despite lots of vague promises and talk, it became apparent nothing was forthcoming.... and because the clock was ticking for Sirius, they had to look elsewhere. Meanwhile the estimated cost to complete the mine rose by $500m to $3.5bn+, based on new costings, which shook the market, and the share price started to plummet. JPMorgan seemingly were the saviours, when they came forwards offering a $2.5bn credit facility, conditional on obtaining $1bn of further senior debt and convertible bonds. But the bonds market didn't like the risk of the project, ultimately a mining project like this with deep shafts through aquifers, in a commodity that didn't even have an established market price, was just too much for the bankers, and they balked.

JPMorgan pulled the credit facility, as conditions hadn't been met, and it became apparent Sirius couldn't service the existing debt they had taken out to start the Stage 1 build (tunnel from Teeside, and upper shafts). So they were on course to default, when Anglo American bought them out at a bargain price of 5.5p.

So the default situation was really nothing to do with the planning costs, which were all funded based on equity raises before the company had any debt, so I'm afraid you've concocted a narrative which sounds nice, but does not match the facts of what happened.

Thanks for the reply MO, much more succinct than me!

"1) I never said lith carb is not used. I said the premium is hydroxide. Lith carb is being used and looked at to keep costs down. As you rightly say it is used by other industries."

But what I'm saying is your sources are behind the trend! This has changed already, what you are saying is incorrect now, the premium is carbonate... there has been a shift to LFP batteries which require carbonate. What technology of battery will ultimately prevail is as you say anyones guess, but they are converting hydroxide back to carbonate now! See articles below;

https://www.metalbulletin.com/Article/4021684/battery-raw-materials/Lithium-carbonate-premium-over-hydroxide-to-persist-in-new-year-sources-say-2022-preview.html
https://www.mining.com/chinese-lfp-battery-industry-increases-lithium-carbonate-demand-drives-prices-up-report/

"2 - No arguement here. Low grade = higher cost ! Whether the mine has 1mt or 8mt rock will cost more. Sure economics of scale will chip away some cost but its moving all that waste energy costs & time costs. Lucky cornwall has a lot of old mines for dumping all the millions of tons of waste."

Yeah I don't think you understand what I was saying here, so I will try again. You understand what a strip ratio is? Its the ratio of waste:ore. So for every tonne of ore mined, how much waste needs to be mined to access it. If we look at the spodumene deposit of Piedmont Lithium (PLL) then the strip ratio is 12:1, so for every tonne of ore, they have to shift another 12 tonnes of waste. The grade of their ore is 1.1% Li2O.

If BL have a strip ratio of say 1:1, then for every tonne of ore there is a tonne of waste, which is pretty plausible it will be around that, if not better given the shape of the orebody. And the ore grades 0.5% Li2O.

So do the maths, to get 1 tonne of Li2O contained in ore... the Piedmont mine has to shift 1180 tonnes of rock (100/1.1*(12+1)). The BL mine meanwhile would have to shift only 400 tonnes of rock (100/0.5*(1+1)).

So despite the grade of the ore being more than twice as high at Piedmont, the mining costs per tonne of ore at BL would be massively lower... thats why Strip Ratios are important in openpit!

And likewise for processing, the mill for a spodumene operation is much more complicated than lithium mica, and it uses both DMS and flotation, which have a high cost of reagents. So cost per tonne could easily be $20/tonne, whereas a more simple WHIMS circuit might only be around $10/tonne. So yet again, BL processing costs per unit of contained lithium could be similar or lower, despite the ore only being half the grade.

So no, lower grade does not equal higher cost, the devil is in the detail in mining. It isn't always "simple" I'm afraid.

What else have we... ok winding up now...

"I recently had a little gamble on Tasmanian Stellar Resources @0.024c ( listed on ASX ).
Next to Rincon Tin mine that is in production for Metals X (0.52c).
They are test drilling a big tin deposit with near S Crofty grades. The geology looks clear and straight forward, with a large deposit + upgrades to come and with the mine next door selling their tin.""

Renison tin mine, not Rincon. Its a huge mining operation in Tasmania, but they are mining 1.5% tin, whereas SRZs deposits (Heemskirk) are lower grade, post mining dilution your looking at sub 1%. The geology may be "simple" but the Heemskirk orebody is difficult to process, it isn't clean cassiterite, its got a mixture of stannite and sulphides in with it, so recoveries will be quite poor. Tin in the form of stannite has no commercial value. Planning permission is also dubious for SRZ, there is a very strong Green movement in the area and they are heavily opposed to further mining developments. Its pretty unlikely it would be possible to obtain planning for the huge tailings dam and processing plant required, so realistically the orebody may eventually be trucked to Renison, possibly after some kind of ore-sorting process. But that is not a surefire route to SRZ ever realising any value from the deposit, as it will rely on a partnership with MLX, on their terms.

"Meldon - does anyone have and knowledge ? Top place."

Yes... its a pegmatite/aplite type deposit containing mainly lepidolite, and also some petalite. Probably zoned between lepidolite/petalite, analogous to lets say, Separation Rapids (Avalon Advanced Materials). So it should be considered a "LCT-type pegmatite" - it has a decent lithium content around 0.75% Li2O average but with higher grade in the hangingwall, but its also of significant potential extent, up to 3km of possible strike - and unknown depth. Potential for byproduct feldspars due to low iron content. Would have to be mined underground, and its in Dartmoor National Park, but doable from a short (300m) tunnel from the nearby Meldon rail ballast quarry which still has planning permission and was operational until 2011. Worth further investigation would need some proper drilling and exploration to understand the exact extent and nature of the deposits though, as it appears to vary a lot over a short distance, it certainly isnt just a consistent 12m orebody, it separates off into "stringers" to the east. And then obviously extensive metallurgical work to figure out what to do with it, probably flotation would prove successful in producing feldspar and lepidolite concentrates. Big advantage with this deposit is you could take samples from the exposures in the old aplite quarries.

But yeah, why not, plenty of worse projects about. I suspect its the Dartmoor National Park aspect putting any prospective developers off, but the dormant Meldon aggregates quarry underground access solution should be considered.

"BUT what I will say is it is not where I live in the 1950's, its 2022 and mining of any kind has to be CO2 zero carbon , minimal footprint especially in and around local communities you only have to look at how SXX went .... Hands up who lost a load of money on that one because of a national park and locals against dust, noise and water table issues ?"

That is not why SXX failed at all, they got planning permission. So if you think that you have no understanding what happened there. They failed because they started building the mine with debt, without having financed construction. It was a financing failure, nothing to do with ESG considerations.

Honestly, I think you massively misunderstand the ESG situation. A lot of this stuff is superficial, people like to talk about it a lot, but its not a major consideration when it comes to the bottom line, which is profit - same as its always been.

"Anyone thinking mining is a breeze even on brownfield needs to do some modern day eco research. Musk will not put his money in sny company now that is not Carbon neutral minimum and using all high tech methods."

And yet one of the few projects Tesla has been involved with at all, is the restart of Goro Nickel Mine (Prony Resources) in New Caledonia. This is one of the most high carbon, environmentally destructive forms of nickel extraction in existence - nickel laterites. But you can make a nice website saying how you are going to move to renewable energy to power the site at some target date in the future, and lots of greenwash, and everything is fine.

https://pronyresources.com/en/
https://www.reuters.com/business/energy/prony-resources-says-tesla-has-agreed-multi-year-nickel-purchasing-deal-2021-10-13/

Nickel laterites are the most environmentally destructive. Look at the huge piles of sulphur, the coal power station (albeit will be replaced by solar in the future), the massive amount of soil (laterite) they dig up to produce the nickel ore. And then the concentrated/leached laterite all gets shipped to China still in the relatively low grade form, to be processed into nickel for battery materials and other uses, and who even knows what happens there, very few pictures exist of the refinery process. Its horrendous, compared to an high grade underground nickel sulphide mine in Australia or Canada, where the environmental impact is negligible. But yet that is what Tesla is doing. Its not because they care about carbon neutrality - its because they want to secure nickel supplies...

And that brings me onto my next point. Though BL claim this to be a "world first", China has been producing lithium from lithium micas, in the form of lepidolite - for many years. Just look up lepidolite processing in China and you will find more info on that.

eg. https://twitter.com/robertbaylis/status/1112671065006837761
https://www.argusmedia.com/en/news/1647213-chinas-jsem-launches-lepidolite-mine

In fact you yourself said both...

"This is THE first time in the world that lithium low grade mica's have produced lithium in any commercial form. A huge step for Cornish lithium production and UK supply. This is THE FIRST TIME IN THE WORLD MICA has been processed to a useable level."
and
"Emh have sent off test batches of lithium carb to car manufacturers in 2018, so 5+ years later we all get a bit too excited."

So how do you square off this? I have to admit I am more than a bit confused. If EMH have produced test batches of Li2CO3 from Cinovec, from lithium micas, then how can BL also be the first in the world to have done this? I certainly cant understand how you are posting both assertions as if they are correct, clearly only one is. Unless the EMH stuff wasnt good enough quality or something? Anyway...

You then talked about the economics of the project... we often talk about South Crofty and spot prices, and trailing prices and so on here. To put into perspective the lithium spot price situation...

The operating costs for Cinovec to process 1.7Mt of lithium ore into a carbonate or hydroxide are approx. $110m/year. You can look up the EMH PFS to check that.

The lithium carbonate produced is around 22,000 tonnes per year. At the prices assumed in the PFS ($12k/t) that was worth $260m, so the profit was around $150m/year. So a 3 year payback or so, fine.

The spot price of lithium carbonate is now $45k/t. That means the value is $1bn per year, and the profit is $890m. Payback 6 months. Yes thats correct, its insane. Clearly lithium prices are not going to remain at current highs once more production comes onstream, the average cost of projects being looked at is around $5k/t Li2CO3, but right now very few of them are being built or have been built - and demand is rising. But yeah, ultimately, more production will come on stream to meet demand and the price will collapse back down closer to the operating cost + sustaining capital. But clearly huge prices are needed to incentivise more production.

Secondly, you talk about grade, and the aussie spodumene producers are obviously mining 1%+ Li2O (lithium oxide) to produce a 6-6.5% Li2O spodumene concentrate, which they then mainly ship on to China. But they are mining inclined vein pegmatite structures, which means they usually have high strip ratios. Lets say 5:1. Whereas BL would be mining a 0.5% Li2O deposit, much lower grade - but its a massive roof zone of lithium mica granite, which will have more ore than waste. So in terms of "dirt" shifted per tonne of ore, or mining cost per unit LCE, it balances out in favour of BL. And so long as their concentration method is very cheap (presumably like Cinovec they will use WHIMS) - rather than the most expensive flotation concentration used by Aussie spodumene producers, again their cost of processing is competitive. The risk for BL is purely the fact the chemical conversion of the lithium mica (zinnwaldite) concentrate to lithium carbonate, is an unknown - in the West.

The deposit BL have is actually huge, its in the old Gunheath china clay pit just to the West of Stenalees, and they didnt really discover it, it was extensively sampled and a couple of drillholes as well, in the 1980s by the BGS, so it was already clear from that work that it was of huge size, certainly it would be feasible to put an openpit design encompassing around 50-100Mt of ore there grading around 0.5% Li2O (this would then become an ore reserve upon completion of PFS). The actual quantity of lithium mica in existence in the whole zone is probably well in excess of 200Mt. (Note the Cinovec PFS is working on 36Mt of ore reserves @ 0.65% Li2O)

Certainly when we compare it to the CL deposit at Trelavour Downs (another old china clay pit) its vastly superior. The grade that CL have (0.24% Li2O) is half of what BL have, and the size of the deposit (within that pit area around 50Mt) is also around half the size of BL, so 1/4 of the contained lithium. Clearly CL were too slow to stake claim over the best lithium mica deposit, which is around Hensbarrow Beacon/Gunheath china clay pit, and that was quite clear from the BGS 1980s reports. CL were of course looking only at brines at the time BL moved in to start work on their project. The whole area in the West, south of Trelavour Downs from Nanpean to Treviscoe, contains over 1 billion tonnes of ore grading around 0.2% Li2O.

So the total quantity of lithium in this area is over 1.3Mt of contained Li metal, or 6.9Mt of Li2CO3. Worth over $276bn at current prices. So its a pretty significant deposit of lithium globally - if the processing route from micas is proven commerically viable.

Just want to address a number of misconceptions mainly in connection to the lithium industry... this may run past 1 post we will see...

"From memory the CAPEX cost for cinovec is appox USD800M-1B."
"Car maunfacturers WANT HYDROXIDE. USD$350-375M to building the average processing plant to upgrade the quality."

Lets deal with this all together.

So the processing route for Cinovec is significant to the Capital costs of the project. The last PFS (2019) gave two processing route options. Its $400m for the Lithium Carbonate (Li2CO3) process route, or $480m for Lithium Hydroxide (LiOH). They can produce either, depending on what route they take. They don't have to produce the carbonate and then have another $300m for a conversion plant, that is just the way the traditional industry (spodumene concentrate produced in Australia, shipped to China, turned into carbonate, then hydroxide) has been set up to date. And lithium brines do not have some magic monopoly on being able to produce LiOH directly, it can be done with all hard rock processes, they just choose not to because historically producing carbonate has been the goal.

Now, the reason everyone is hesitating on whether to produce a Carbonate or a Hydroxide, is its not clear in which direction the battery industry is going. A couple of years ago, it looked certain that Lithium NMC batteries were the way forwards, as they have the highest energy density - and they require a hydroxide, so everyone was moving to that. But now it looks like LFP batteries have some major advantages, in terms of safety performance, ease of manufacture, using less nickel & cobalt - and we now see Tesla, an industry leader, converting all their cars to use these batteries. As explained here;
https://www.argusmedia.com/en/news/2130049-lfp-battery-switch-drives-supply-chain-changes
https://insideevs.com/news/556099/tesla-domestic-lfp-battery-production/

Carbonate is also used in non-battery applications (called technical grade). We can now actually see carbonate prices have overtaken hydroxide, so your behind the curve here, hydroxide is not more valuable. Clearly anyone that spent $300m on a conversion plant, or on a plant producing hydroxide cause it is higher value, is not too happy; https://www.spglobal.com/platts/PlattsContent/en/market-insights/latest-news/energy-transition/easset_upload_file62994_2210909_e.jpg

Where this all ends up, depends entirely on the LFP vs NMC issue. So yeah your big negative, is somewhat out of date.

Its not the parent company, its just dual listed, same company. So CUSN itself is down 19% in Canada currently. Trading continues to be very volatile. Even down 19%, the price is 46c, which translate to 27.3p, so only a tad under where we are now here.

Yeah I concur with this analysis and your numbers match mine. There is clearly a 3-4x upside in the share price over the next couple of years from moving towards feasibility study level work in a steady tin price environment, just for South Crofty and excluding any other resources that may or may not be found. If the tin price moves higher, the upside is even greater. If it moves lower, you could lose everything, haha. That's resource stocks for you!

Like I said if you want to bet on tin prices being sustained or increasing, this company should be part of that portfolio, because South Crofty is a world class tin deposit. And who knows they might find something else.

"The 2017 PEA was conducted at $10 a lb or around $22400 per tonne. You state that a PEA now would need to use $22000 per tonne, which I am happy to believe. But it does suggest that no account is being taken of the rise in tin prices since 2017. Nor does it take into account the likely future impact of future shortages of supply on price. This standard practice seems over cautious to me."

Metal prices can go down as well as up, standard practise reflects that reality. Check the graph, tin prices have only risen really since late 2020, hence why the 3 year trailing price is still only $22k, and every month at the current price level is lifting the trailing price by $0.8k or so. In a years time the trailing price will be >$30k, if current prices hold.

"So perhaps CUSN will have to raise £15m for initial pumping dry, £3m for drilling, £2m for a FS and then £5m for another year's pumping, whilst funding is raised. What do you think about those figures?"

£25-30m should get you to a feasibility study yeah, will probably take about 3 years from start of pumping to completion of the study. And potentially by then tin price could be, well anything, but lets say it was $40k still, you'd have a project with a NPV in excess of $500m, with a feasibility study that you could take to the banks and get the required funding to get into production with. Then yeah, the existing quantity (so pre-dilution to raise the money for the FS....) CUSN shares would be worth up to £1. With dilution added to raise the funding, more like 70p.

But look at the ifs and buts to get there. We need the tin price to hold, we need the funding to be raised successfully, and for the pumping and drilling to be executed in a timely manner. Risks, reward, dyor. But yeah for sure, if you want exposure to tin prices, then buy CUSN. And the higher the share price is now, the greater the chance of success. Price on the TSX closed on friday at 34p equivalent.

Valuation;

"I hope you do not think I was in any way criticising your previous post when I wrote that I was struck by the high level of caution?"

No criticism taken, just you said it was cautious, I was just showing you what cautious actually looks like.

"Then there is the volume effect. Again it is sensible to use indicated resources, but this may be cutting out 90% of the potential."

But what I'm trying to explain to you in that post is most of this "potential" will never come to bear in any value in the short-medium term. How much would it cost to turn this "potential" into an indicated resource, and then into a mine plan? Thats the question you need to ask yourself. A great deal more than the infill drilling that it'd take to transfer the inferred resources. The costs to delineate more resources at significant depths, under flooded mine workings, in these narrow veins, will be so huge, it simply isn't even worth drilling such potential to create a resource, until a date closer to when they can be mined, especially if they are lower grade than resources you have already delineated.

"How would you view this example calculation? If we assume Revenue starts at 100 then rises by 48% we would have 148.
Costs might plausibly be 50, and if those rose by 67% we would have 83.5 as a result.
Profit would rise from 100-50 = 50 to 148- 83.5= 64.5 . 14.5 extra on 50 is up 29%."

Thats exactly correct, that is indeed the maths I referred to. So in your scenario your 67% increase in ore, 48% increase in tin metal - results in a 29% uplift to the profits. That was exactly my point. Now consider also that this is over the entire mine life, not in an individual year, so when you apply the discounted cash flows to calculate NPV, you lose out even more, so the gain is even less than 29%. In an individual years production, you are still mining the same quantity of ore, for the same costs - but receiving less revenue as the grade is lower. You just have more years of production (greater mine life), further out, where discounted cash flows are greater. Unless you increase the mining rate as well, which means more Capex. So yeah, you should be able to quickly see how your 67% increase in ore quantity can translate to only a fairly small increase in NPV.

Thats a Buy/Hold in case that was unclear!

Yeah, GLA. I think this company has never been better placed than it is now in terms of leadership and macroeconomic trends, to make real progress with the Mynydd Parys project and realise a sustainable increase in value in the underlying assets and hopefully, consequently, the SP.

A few points regarding "huge caution" - I think the reality is I'm being pretty generous in the analysis, if you want to see some points of caution, then note;

1) In a feasibility study, either PFS or DFS, only indicated resources can be used, so the inferred resources do not count for that purpose. A feasibility study will be required before the project can be financed with any significant component of debt.
2) Whilst the resource has been improved in the latest update this is largely an expansion of the inferred component of the resource, and the grade was also decreased in both components. For instance, the actual tonnes of tin metal in the indicated resource has only an approx 10% increase over the previous resource (33kt Sn vs 30kt Sn). So if you re-run the PEA, revenues will not be improved proportionate with increased tonnes of ore (67% increase), but rather with the tonnes of metal (48% increase) - minus increased operating costs for the extra ore (67% increase). In other words you have 67% increase in operating costs, for a 48% increase in revenue. Do the maths.
3) The potential extra mine life extension is highly speculative, this is literally just random extensions of previously mined (19th century mainly) lodes which may or may not actually exist. It doesn't constitute any formal type of classification. There is no indication of the grade of this "potential" either - so for the purposes of market valuation its fairly meaningless, other than to say there is are potential targets for further exploration if required.
4) The PEA cannot be (formally) conducted at current spot prices, only at a 3 year trailing average price - which currently is around $22k/tonne. With time, if the tin price continues to rise or is merely sustained, obviously the trailing average price rises too, but right now, the "north of $500m NPV" is highly speculative as it relies on the tin price rises being sustained over the next 2 years, which in the metals market is never a certainty.

The key point really for me in terms of realising value is ultimately getting to this feasibility study, and to do that they need to have a methodology to increase indicated resources through further drilling, and they need to prove they can do this for a reasonable cost per tonne of contained tin in resource. It looks like they want to pump the mine out before conducting further exploration from underground, so thats a big upfront cost on top of any drilling costs per metre. And then these are very narrow lode deposits with extremely high "nugget-effect" or variability, so a lot of drilling is required to give an accurate representation of grade. This is where we get into the real nitty gritty of how things can be done, and what they cost, rather than the speculation.

Thanks SB. Yeah there's definitely an assumption that no one will ever look back at the previous record, only the forward facing rhetoric, and whilst that may be true of many day traders, no one (with any sense) wanting to make a more serious investment... or doing due diligence for a large loan... is not going to check company history and past performance records - and what they will no doubt find is probably not reassuring unfortunately.

"SML to refocus on Redmoor with a major equity raising to move the project forwards."

Reflecting on this further, unfortunately the boat has probably sailed on this, with the departure of Brett Grist and James Blight, the two geologists that SML inherited from the NAE JV, who spearheaded the deep drilling programs in 2017-18 that discovered the majority of the new resource. Quality people with that level of experience are rare, and they had a proven record of success at Redmoor, so they clearly had a good understanding of the deposit (or were very lucky, and I think in this case the targeting was pretty clearly not just luck). Without an experienced team on the ground, it will be difficult to take the asset forwards - of course a new team can be assembled, but if SML were going down the route of taking Redmoor forwards themselves, they should have retained those geologists.