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Prop

A few further thoughts

Redmoor hosts a 2019 JORC ‘Inferred’ Mineral Resource of 11.7mt at 0.56% WO3,0.16% Sn, 0.5% Cu. Hopefully to be expanded shortly.

The above tungsten in the W03, is 184 out of (184+16+16+16) i.e. 184/232 or 79% tungsten. So 11.7m x79%x 0.56%x $200,000/T * is the contained value. i.e. $10.392bn. Say 80% is recoverable. If mining and processing takes 25% of that you are left with around $6.0bn. Thats part of the value SML currently offers to TUN i.e. excludes tin, copper silver and exploration potential. So huge value offered by SML. * $200,000 is recent price per tonne - now higher

But TUN doesn't just offer SML a saving of perhaps £120m capex. It also offers the means to bring forward monetisation of the asset by processing a lot sooner - Say that is worth 8% per annum on the NPV for 5 years. That adds around $2.4bn of value. + It reduces the risk of a a future fall in the price of tungsten. i.e. Putting SML and TUN together, the maths is compelling.

And SML's market cap of £129m is a small fraction of the value it can bring to TUN. The "Prominent International investor has obviously spotted this"

Prop

A few further thoughts

Redmoor hosts a 2019 JORC ‘Inferred’ Mineral Resource of 11.7mt at 0.56% WO3,0.16% Sn, 0.5% Cu. Hopefully to be expanded shortly.

The above tungsten in the W03, is 184 out of (184+16+16+16) i.e. 184/232 or 79% tungsten. So 11.7m x79%x 0.56%x $200,000/T * is the contained value. i.e. $10.392bn. Say 80% is recoverable. If mining and processing takes 25% of that you are left with around $7.5bn. Thats part of the value SML currently offers to TUN i.e. excludes tin, copper silver and exploration potential. So huge value offered by SML. * $200,000 is recent price per tonne - now higher

But TUN doesn't just offer SML a saving of perhaps £120m capex. It also offers the means to bring forward monetisation of the asset by processing a lot sooner - Say that is worth 8% per annum on the NPV for 5 years. That adds around $2.4bn of value. + It reduces the risk of a a future fall in the price of tungsten. i.e. Putting SML and TUN together, the maths is compelling.

And SML's market cap of £129m is a small fraction of the value it can bring to TUN. The "Prominent International investor has obviously spotted this"

Prop

Certainly TUN would be likely to have good cash flow then and more would be known about Redmoor - therefore less risky.

But both companies may now be in a major's sights, either individually or both together. Re TUN for SML - I would think EXIM funding may be a catalyst for action as that announcement is likely to increase TUN's share price considerably, so making an approach for SML result in an issue of fewer shares. Another possibility is that a big buyer of tungsten - US Dept of War for example, or MoD may intervene to ensure a future supply.

Hi Prop

I did post something - I think along the lines that SML should apply for the designation as it would help speed the planning / permitting process - taking it out of coucil hands and giving to a Minister of State so timelines could be shortened. If SML could get it, SML would be following in the footsteps of Cornish Lithium, which has achieved that designation for its lithium project.

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Brad. Great punchy post

What evidence is there that the "Whales" (Coffey & Landsdowne) have "locked up the register"?

Are they acting together? If so, they would be forced to bid for TUN at the highest price either have paid in the last 12 months wouldn't they?

What evidence is there of a short position in TUN or SML?

If there is or has been a short position is it uncovered or covered?

Dobre

Good points about TUN chat board etc.

It would make sense to have a good idea of the value in the SML /Duchy exploration area before any approach from a bidder or merger offer for the company is entertained/evaluated. But that would require more drilling and analysis which would take a lot of time. Not sure SML will have that. Perhaps a JV or sale of Redmoor alone makes more sense. How fast can Coffey-Kirkoswald/ LP/Maxey concert party move? With paper - probably fast, with cash - who knows? Those who need tungsten are pretty desperate for it, so that argues for a move happening sooner rather than later, but probably not before March 31st.

1+1 = £120m in capex saving, a huge increase in cash flow from sales revenue, and a big reduction in the time to receiving that cash flow. That is a lot of big low hanging fruit!

Outstanding - permits, planning, building a decline.

Thx New Ormy, will take a look at the TUN board.

FTJNY

As the vast majority of the value of SML ore is in tungsten and tin, it seems more likely the ore would go to Hemerdon than Pool (South Crofty). SC is also quite a lot further away from Redmoor than Hemerdon. Furthmore, South Crofty does not yet have a process plant, or the funding for that, let alone already- built spare capacity. South Crofty may look to its own development potential for more ore to process.........................

It would be interesting to hear what the cost of the extra plant needed for copper and silver would be at Hemerdon.

Prop. An add-on to the TUN flowsheet would seem the most practical way forward.

Tin yes, Copper and Silver no.

Dobre TUN's processing plant at Hemerdon will have very significant overcapacity at the back end of the process, due to the Tomra x ray sorters to be introduced after crushing - as you state- 70% less material to go through after sorting. So an opportunity arises for SML's Redmoor, to do mining crushing and sorting and then to send a considerably reduced amount of material to Hemerdon for the rest of the processing using their spare capacity.

This benefit of merger/j.v./takeover/tolling deal, augments the previously mentioned benefits of saving time to get to production and switching from low grade ore to high grade ore. Huge wins seem to be there for the taking. We may find that we do not even need to spend on a FS on a processing plant at Redmoor. I expect metallurgy tests will have to confirm the possibility.

NPVs are calculated assuming the company sets up its own process plant at huge cost £100m+

With a process plant down the road owned by Tungsten West, a huge cost saving and a huge time saving can be achieved by putting the two companies together. This thread suspects that the recent new arrivals (prominent international investor and Coffey) both here and at Tungsten West have just that in mind. So we can upgrade the NPV for the benefits of re-assessment of the ore, for the impact of an expanded resource, for improved grades, for better recovery rates, and most importantly for an explosion in the price of tungsten, but dont forget on top of all that there may only be a need to build a decline (£15m) and mine and buy lorries, not a process plant. This looks like a multi bagger to me.

Anyone know who the "prominent international investor" is?

If Coffey is working with the "prominent international investor" as yet un-named, it would seem so.

Tun has processing plant about to spring into action but low grades, and SML has the outstanding grades of material. A tempting proposition and a great way of bringing forward v strong cash flow, whilst also saving huge set up costs.

It may not be MRE that provides the peak - it may be a battle between hedgies, or a joint concerted effort..............

Good thinking Dobre.

Maxey uses his own name. I think the prominent international investor is aligned with Greg Coffey. Interesting that the name of the ultimate beneficiary has not been disclosed despite being over 3%. How long can that last? But we can draw conclusion from someone wanting to keep a low profile........

Hedge vs Hedge, or Hedge working with hedge?

This week could be very interesting.

See SML RNS of 19 March - quote "The Subscription was led by a prominent international investor who approached the Company"

Where have we seen that phraseology used before?

How about over at Tungsten West in RNS of 5 February "it is undertaking a non pre-emptive equity fundraise through a direct subscription with the Company by a prominent international investor ("Subscriber"), a new investor, raising £29,288,296"

it looks to me as if a big investor is building stakes in both TUN and SML... Doesn't take a genius to work out why or what might happen next.