Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Croissant
Perhaps also worth noting that the tungsten and tin prices are denoted in strengthening dollars and are rising, whilst our cost base is denoted in £.
"How a global race to secure copper supplies sparked a £31bn bid for a FTSE giant-
Heightened demand for net zero minerals could trigger a wave of dealmaking in mining"
https://www.telegraph.co.uk/business/2024/04/25/how-global-race-copper-supplies-sparked-anglo-american-bid/
Is this the lighting of the blue touch paper for the sector? The BoD can see the potential ahead, it is likely others will follow.
VBR will be aware of the holding in CL , and also the royalty arrangements and annual fee. In the whole valuation of CUSN the exposure to CL is a small component but may become much larger if CL goes into production. It has the backers to do so.............................
.. is reacting to the re-armament drive. TUN to benefit perhaps................
Natnrg
3 to 4 times his buy in price of 18p would equal 54p to 72p. That would be before the impact of the rise in the tin price.
Sir Mick's game plan......................
Here s an extract from an interview with Sir Mick Davis, whose Vision Blue Resources put £25m into CUSN
Question :- Generally speaking, what kind of investment criteria are you using to look for these opportunities?
Sir Mick:-
It all starts with the rocks in the ground, just to be very simplistic. I'm looking for the best quality resources that I can find. I look for resources that have been well-defined.
Then, I'm looking for high-value, low-volume commodities. My experience in the past running large mining companies is one of the big drains on the value proposition because is if you have to establish a large logistics system. You can only make it pay if you have a very large mine.
I want to be in geographies in which I understand how to operate. They can be complex geographies ... but I need to know how to operate in them. I need to know that I can identify and mitigate the risks.
The third thing is [that] I want to be able to know that I can enter into that project at a 0.2x, maybe 0.3x net present value. Then, put in the capital required for the project to progress either to feasibility, or feasibility to construction, etc. and inject my team into the investee, so that I can make sure that they are managing the risks associated with bringing up the value curve.
By the time we get into early-stage production, which is the time I would like to exit and hand over to the major mining companies, I consider maybe 0.8x to 1.0x NPV and therefore make my 3x to 4x without having to make an assumption about what commodity prices are going to be.
I'm looking for commodities that essentially talk to the energy transformation and the [environmental, social and governance investing] narrative. There is a hell of a lot of institutions that want to fund those sorts of projects. I essentially want to be the person who feeds the ducks that are quacking for that.
Its now or never, for fund raising that is.
The Gawthorpe gap? Please explain.
Https://markets.businessinsider.com/commodities/tin-price?op=1
Https://markets.businessinsider.com/commodities/tin-price?op=1
How long will it last?
If the US decides to re-build its strategic stockpile, it could be a long time. If investors agree that the market is going to be short of tin, they will buy in droves too. If Indonesia and Myanmar continue as they are that will also increase the shortage. In any case there has been a little investment in bringing new tin mines on stream in recent years.
Tiny amounts of tin are used in billions of items. The cost of making those items is hardly affected by the tin price. i.e. demand for those items is little affected by the tin price. You have a number of driving forces which could send the tin price much much higher as we have seen happen before.
CUSN as an investment has a highly geared exposure to the tin price. The conclusion is obvious....................
Https://markets.businessinsider.com/commodities/tin-price?op=1
Jeffus888
Your timing looks great. The recovery from the shock news of the resignation of the CEO is underway, and the more recent erroneous rumours about flooding in the mine have been addressed by the company broker.
Meanwhile the price of tin has had another boost rising 3% yeaterday to $32,775.
Plenty to look forward to:-
1. The publication of the PEA, with a revised NPV. This is expected to arrive before the end of June. In my opinion it will show a valuation for South Crofty alone, of multiples of the current market capitalisation. As discussed before, to that NPV, the value of rights elsewhere (e.g. UD) in the CUSN portfolios should be added, together with value inherent in the arrangements with Cornish Lithium, when comparing with the market cap.
2.Feedback from the exploration programme. This is likely to come before the new PEA, as results logically should be incorporated in the PEA. The exploration programme will give a good idea as to the extent of mineralisation in the newly discovered Wide Formation and Great Flat lode splay. This will have a bearing on the likely mine life.
In my view, there is a good chance that the mine life may be extended with a considerable benefit to the NPV.
3.Interest rates. Next month the Governor of the BoE expects inflation to fall sharply. This will increase expectations for the first interest rate cut. This is likely to be beneficial for valuations of companies cash flows. Also it will be likely to increase those cash flows as interest costs or expectation are reduced. As CUSN will be moving towards its production decision, this is coming at a very good time for shareholders.
What might have an adverse effect?
1.If the disruption in Myanmar is resolved and exports pick up, there might be some relief amongst tin traders and tin pries might fall. However at present the opposite appears to be the case.
2. Faster use of cash than expected - Await half year results in the Autumn for this. The company had a net cash balance of C$25.8m at the Dec 2023 year end. So appears to be well able to complete the tasks set out - PEA publication, drilling programme and perhaps also some preparations for mining such as dewatering and shaft refurbishment.
3. Any signs of management disruption. The loss of the President and CEO came as a shock to the market. As long as the operations management team settles - especially that of the COO, CFO and CDO, all should be well. Any sign of further disruption is likely to be taken very badly.
Bonkers99
Whilst a lot of costs are indeed up 50% don't forget that a big chunk of cost saving is likely to be achieved by using the XRT sorters. Their use will be likely to cut the cost of the the plant required very significantly, so big outflows of cash at the onset and thereafter will be removed from the NPV calculation. Hopefully, the saving both in capex and in opex will offset to a considerable degree the impact of cost inflation since 2017. All will hopefully be revealed shortly!
Argylerich
LovelyBoy is referring to the Tungsten West plc (TUN) tungsten/tin/aggregates project at Hemerdon, near Plymouth, which is awaiting the outcome of the public consultation over the Environment Agency's proposal to grant the operating permit.
The cut off date for comments is about 2 weeks away now. The permit has had the effect of creating a logjam in the process of obtaining finance to get up an running again. If the permit is granted there will be a huge sigh of relief from investors / those wishing to create a supply of a critical metal for the Western world
And perhaps any shorters have been taken to the cleaners. Hope so. Erroneous rumours on boards elsewhere have been firmly squashed.
Hi LovelyBoy
Good to hear from you. It is a case of "least said, soonest mended". I agree the outlook is really good. Not only good for investors, but the whole project is worthwhile for Cornwall, and the UK.
The news out of the Plymouth area is also very encouraging. At last. Everyone has high hopes now for the final piece of the jigsaw which will unlock an attractive picture. That may help sentiment in all SW miners.
Gingy - "Personally I don't think this will go into production under Cornish metal. One of the big outfits will swoop in and take us over."
Possible, but Vision Blue Resources- the major shareholder with 25% of the shares,- are a big outfit and have recently raised around $600m so have multiples of the firepower needed to see this into production. The upside is enormous and they know it having BoD representation. Selling out now before the expected tin price run is unlikely IMO.
Bonkers99 Also to consider, the value of CUSN is not just indicated by the NPV in the PEA. To that we should add, the value of UD , Gwinear etc and the value in the holding in and relationship with Cornish Lithium.
Bonkers99 "Can anyone float an expected NPV number for the PEA?"
Outsiders cannot, No. But here are some pointers.
The 2017 PEA* showed an NPV of $130.5m assuming a tin price of $10/lb around $22,000 per tonne.
• Source:- Https://minedocs.com/21/South-Crofty-PEA-02162017.pdf
In the sensitivity analysis (p22) it showed that if the tin price rose to $11/lb around $24,200/tonne- a 10% increase- the NPV rose to $188.1m i.e. an increase in NPV of 44%. i.e. highly sensitive.
Now the tin price is $32,320/ tonne or 47% up on the 2017 central estimate. All other things being equal, which they are not, would suggest an adjusted NPV of around $400m.
Much has changed since 2017 including the cost of building and running the plant, interest rates and thus the discount factor for the NPV calculation. So the $400m appears to need to be adjusted down considerably.
However there are also a number of other positive changes.
Because the indicated and inferred resources have increased very significantly it is reasonable to assume mine life has increased or the throughput could be increased. This would move the NPV up. See below***
Furthermore it looks as if the cut-off grade could be reduced as XRT ore sorters have been trialed by CUSN with very encouraging results. This would help to further increase the resources and boost the NPV. The same machines are likely to reduce the size of the plant required to process the ore- helping to reduce initial capex and opex – which also would help the NPV upwards.
And the discovery of the Wide Formation and Great Flat Lode Splay may well add to the resources, when fully assessed, which again would either enable CUSN to increase throughput or extend the mine life, both of which are likely to enhance NPV.
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***In the 2017 PEA the indicated and inferred resources were for the lower & upper mine respectively :
Indicated 1660+257 kt Inferred 738 +464kt
Total 2,398 + 721kt =3,119 kt
Indicated and Inferred at 5/2/24 for the upper and lower mines
Were :-
Indicated 2,896 kt +260 kt Inferred 2,626 kt + 465kt
Total 5,522 kt + 725kt = 6,247 kt
A significant 100% uplift, with the likelihood of more to come from the Wide Formation and GFL Splay.
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Not long to wait for the actual figures in a new PEA. Good Luck everyone.