Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Not all of our licences allow drilling, some only permit reconnaissance or surface exploration. And just because we drill in a particular licence, it doesn't mean that we can move the drill somewhere else in the same licence. I imagine there's red tape at every turn.
I'm sure that IronRidge are prioritising resources and cash in the best way possible although it's not always obvious to anyone without full knowledge.
Makes my peer comparison (below) look outrageously conservative! I'll revise once all this plays out.....
Hi Munch, I actually think it's good to have differing opinions on a board as it keeps us all from getting carried away.
I agree about timescales. This isn't an industry that gets things done overnight. This is AIM, this is mining and this is Africa. This is a long term investment for me. I appreciate that most people want to 'get rich quick' and are not interested in the much more feasible prospect of 'getting rich slowly'. However, I do expect to see several sp catalysts this year (although I cannot predict exactly how the market will react). It cannot ignore us forever.
There’s no hurry for Sumitomo or Assore to buy us out. They could probably prevent someone else from doing so (or at least the shareholder register would scare them off) but they would also struggle to gain a majority if they wanted everything for themselves (unless the offer was too good for everyone to refuse).
We know (absolutely) that Assore are interested in the lithium. They have also stated that they are not interested in the gold. So maybe buying IronRidge is not the best option for Assore overall. We can also assume that it's neither in Assore's or IronRidge's interests for any lithium asset sale prior to a resource estimate or metallurgical confirmation. Too much risk for Assore and it would not command a good enough price for IronRidge.
Today's KDR news (Hodgefox's post) shows that lithium deals continue to happen even though the market is seemingly bearish on lithium. I've said it before but there's only so many big lithium deals before the smaller guys start to get noticed. Our time will come.
I'm not sure that Ghana can disappoint at this stage. John Meyer already did a 'back of a fag packet' calculation based on previous drilling data - it's in excess of 10Mt. That's from one of the smallest mapped pegmatites in the area. If it's only 10Mt (and for the record, I expect more), upside here is phenomenal.
Great tweet from Len today btw! Lots more to come. DYOR
Hi Munchbox, you questioned my future valuation of Ghana last week and I came back with a full explanation and justification. Any further comments?
Thanks Hodgefox.
Ghana is one of the best countries in Africa to do business right now. I suspect that with further investment, it will rise to the top of the list.
The Ghanaian government are eager to diversify their mining sector which has historically focused on gold.
Yes Mike, our licences in Chad are certainly not in a prime location like our Ghana licences but they aren't quite in the middle of nowhere. The licences are around 10 - 20km from the main road linking Goz Beida to the city of Abeche. It's then around 150km to Abeche which is Chad's 4th largest city and has an airport.
Gold transport is a little different to lithium transport - whilst lithium goes in bulk transport and onto a big ship (probably to China), gold will need to go to a refinery - we would produce 'dore bars' which are around 80% pure gold and these need to be refined before they have full value. There are only a limited number of accredited refineries worldwide and the nearest is probably the Rand Refinery in South Africa.
Our Cote D'Ivoire licences are spread across the country but the advantage here (over Chad) is that CDI already produces a lot of gold and our licences are all along strike from operating mines. Zaranou is very well placed - only about 120km from the capital Abijan (which has an airport and a large port). Bianouan, Bodite and the three lithium licences are similarly positioned with Adzope being less than 100km from the capital.
So in terms of costs, Chad will be less competitive than gold mines operating out of Ghana and Cote D'Ivoire whereas our Cote D'Ivoire licences (especially those mentioned above) could be on a par or more competitive. CDI is certainly further ahead with infrastructure than Chad.
Thanks Eish. I believe it's a very conservative target.
With Assore and Sumitomo on board, there are many options open to IronRidge that other explorers / developers do not have. We have the backing of some very cash rich shareholders who also happen to be experts in mine development and mining (in Africa) AND have publicly stated that they are interested in the lithium.
The likelihood of IronRidge taking the Ghana lithium into production on their own is very small imo (but it is an option). We could end up with a smaller piece of the pie but with significantly lower investment required from us. Over the longer term this would be my preferred option because we all know what AIM is like when there's a £100m capex required!!
I also want to reiterate the 'distance to port' and infrastructure points that Vince keeps making and I cannot stress how important this is to our Ghana assets. If roads and power are not there, we would have to build them, at an enormous cost to us - nobody else is paying for this. And if the port road is 1000km away, we would need to build a road to link up AND then pay for the extra trucking costs to get there. This is for every single kg of mined material. Compared to a mine in deepest DRC, it's probably worth $20m in capex savings and $7.5m every year (for a medium volume 200ktpa spodumene concentrate). That's potentially $7.5m every year extra profit for IronRidge compared to other African deposits. Over a 20 year LOM, that's a whopping $150m. Now, I wonder why Vince mentions this in almost every interview ;)
GLA and DYOR
There are lots of ways that the Ghana lithium can reach an mcap of £300m but per comparison is probably the most realsistic…
1. Peer Comparison (with future peers)
Once upon a time......Pilgangoora was just a few drill holes in the Australian desert. Today it's a 226Mt resource and it's owner, Pilbara Minerals, sits at a market cap of £650m. Kidman Resources' Earl Grey deposit is a monster 189Mt and Kidman today has a market cap of £300m (although it only owns 50% of Earl Grey). There are many examples like this.
But IronRidge doesn't have 200Mt of lithium - how can you compare it?
Our current drill, Ewoyaa and Abonku, are just tiny specs amongst our mapped pegmatites in Ghana. Yet they are likely to deliver a resource of between 15Mt and 20Mt. We have at least 10 other mapped pegmatites that dwarf Ewoyaa in size at surface. Not including many other smaller pegmatites and pegmatite swarms. So this is where we can use current data to speculate........ we know that Ewoyaa is at depth, we know that it's solid mineralisation (not sporadic in nature), we know that it's high grade. If we now apply that same geological logic to the other known / mapped pegmatites, it's very feasible that we could reach a total resource exceeding 200Mt. I'll just add that Egyasimanku is the big prize in Ghana although I've scaled Hweda against Earl Grey and it's not far away. I am hopeful that one of our bigger targets could be our own Earl Grey.
But Pilgangoora and Kidman are both producers - isn't that an unfair comparison?
At the moment, yes, it's not apples for apples. But as speculative investors, we can look at future potential. I'm not going to invest in something that's already producing - I would like my investment to grow exponentially due to new discoveries. It's more risky but I can look at geological potential using data already released to market and that way I reduce the risk significantly.
But the price of lithium has fallen recently and there are no guarantees that Pilgangoora will be worth £650m in a few years.
There are some advantages that IronRidge has over other explorers. Firstly, we have scale and upside potential - enough exploration targets to keep the resource growing for many many years. This means that we can build just the one plant and truck everything in from all of the deposits. It means that the capex is cheaper vs life of mine - a very big economic advantage. Secondly, we are closer to port than any other African explorer and closer than most other world deposits. There is a bitumen highway and power lines run right across all of our licences. Again, this reduces the capex considerably and our operating costs will be lower than 90% of all other producers. Thirdly, we are in Ghana. Much cheaper to mine in Ghana than our competitors in Australia. So even if lithium prices stagnate or drop (so long as the world needs lithium), our Ghana deposits will be very competitive.
Yes N2S, that's the numbers game that is being played. We only need one 'company maker' to take us to a £300m mcap. Ghana's long term potential should easily get us there (simple peer comparison). Dorothe is a huge potential discovery just looking at surface exploration alone - already compared to some of the world's biggest open pit gold mines. Zaranou is the new favourite in Cote D'Ivoire and 'could dwarf Chad'. Then there's another 9 province scale assets in the pipeline.
I expect that this year we will discard at least a couple of the less prospective assets. Once we really start honing in on the big ones, we will start to see some real movement in the sp imo
With such low liquidity, it doesn't take much to move the sp up or down. Only 2 small sells this morning was enough for the MMs to drop the bid. Unfortunately, such licence news is never exciting enough to encourage buyers.
Some posters use these 'boring' announcements to mock progress but today's RNS is a very important step in getting us towards that big discovery.
Let's also not forget that Zaranou is a new licence and at this stage should not be impacting the sp (up or down). Ghana (Ewoyaa and Abonku) is where our current value is at.
Slightly disappointed to see a small drop today but that's probably because people were expecting to see some DD results (not just a boring 'licence secured' RNS)
I'm pretty sure that we are still waiting on exploration permits for some of our other CDI licences, hence my 'record time' comment earlier - 2 months for an exploration permit is very very good.
Obviously, some on here expect the permit, trenching, drilling, resource estimate, PFS, BFS, mine design and mine built and 15 years of production all within 2 months.
Remember, this is Africa. To get anything done in 2 months is a real achievement.
VM holds over 4.3% of IronRidge. He also holds a chunk of DGR Global who hold 22% of IronRidge. And then there's the various holding companies, controlled by VM who have more shares in IronRidge and DGR. On top of that, VM's friends and family also have a big holding. Our CEO is one of the highest invested (by $ value) across the whole of AIM - very likely in the top 5% of CEOs
Looks like we got the Zaranou exploration licence granted in record time. Just need to see those DD results now. IronRidge has pushed hard for this new gold prospect so just how good is it?
Looks like a few more confident enough to fill their ISAs with IronRidge! Good luck everyone and have a great weekend
Outgoing: Bastiaan Van Aswegan, Executive Director for technical and operational strategies
Incoming: Kieran Daly, Executive Director for growth and strategic development
Hi How49, when it comes to ISAs some brokers don't understand AIM stocks. You need to do it over the phone, it costs more but its the only way to get a good spread.
Mike, this is as much as I understand. Someone like Farq might give you more accurate advice...
1. No charge on the ISA. Only charges on my SIPP
2. Every UK taxpayer is entitled to £20k ISA allowance
3. You can buy and sell within the ISA at any time
4. There is no tax on any profits made over any time period
5. Same broker fees as for any normal trading account
6. Yes, they just show up as a separate account
That was mine at 17.50 and 17.52
Happy ISA day everyone :)
https://youtu.be/tBuJmawP0LU
In case anyone has missed the big blue box above, here's the YouTube link to VM's latest interview.
Great to see him talking about proximity to the Ghanaian capital and to a deep sea port. Also have a main highway and power lines within 1km of licences. I recently mapped every lithium project in Africa and IronRidge are in the best position (by a long way). It's an exceptional location. Anyone who knows anything about the cost of mining will know what this means to value and profit!
Thanks Kevin for your summary of the investment evening. I have talked to VM and LK on a few occasions and if I thought (even for a second) that they were disingenuous, my money would not be here. I couldn't think of two better people to be guiding IronRidge forward!
Best of luck to Tsotsoobilove. One thing I really like about IRR's work in Ghana is their engagement with local people and their sense of community. I hope you get to invest in IronRidge as I genuinely believe we will all be richer in both senses of the word.
Lastly, a couple of points I took from VM's lse interview:
1. VM, LK together with family and friends hold close to 15% of the company
2. Lots of news incoming; metallurgical testing from Ghana, exploration updates from Ewoyaa & Abonku, more results from Cote D'Ivoire (possibly DD from Zaranou) and some interesting stuff happening in Chad.
Welcome to all new posters. This is a great board with lots of shared research and honest discussion. GL all
Great post Hodgefox. Thanks for your feedback
Actually MB, history disagrees with you. I remember one day when we popped up 80%. Funnily enough, that was on the way from 18p to 48p. I appreciate that it was also a the height of the lithium boom but recent market analysis suggests that another boom is coming (based on the oversupply myth falling apart). Could quite possibly coincide with our maiden lithium resource from Ghana and maybe some Assore related news.