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The cyclone issue in MZ is bigger for agriculture (food supply) and lower income population in poor quality housing and vulnerable areas. Plants like KMRs and other mines in the region are built with the cyclone and rainy seasons in mind. They limit operations and ensure safety of personnel when there are weather risks. They're also in the lee of Madagascar. Of the two major storms this year one went north and one went south.
However, they have previously had upstream power problems with EDM (MZ power company). They've jointly invested to ensure the mine power is at lower risk from these sort of events than it has been historically, as well as having Aggreko generators for backup and Dip Doctors for power variances.
As you say, Rio have an interest in Savannah Resources where the asset is in Mozambique. Kenmare's Moma mine is also in Mozambique.
Following the cyclone in Mozambique, the Red Cross reported that everything had been destroyed. I believe that that was an exaggeration but the cyclone caused a great deal of damage and dislocation. The country is still recovering.
Sierra Rutile had its own problems in Sierra Leone with civil unrest and then more recently Ebola with the knock on effects which that horrible disease had on the company.
Most countries have benefits and detriments.
Mozambique is a bit further from Quebec than Dundas.
Very optimistically say $200m development capital borrowed over 10 years. That's $20m+ per year in loan repayments and $20m per year in depreciation expense, + interest. You could still be looking at upwards of $10m per year in sustaining capital. Very round numbers, not necessarily accurate but illustrative. Puts something like $70m revenue and $25m EBITDA in perspective.
Whilst RTFeT are looking at the consumability of Dundas product, they are also working with Savannah Resources in MZ on a deposit that most likely has characteristics closer to Kenmare's.
There is a non-linear relationship between TIO2 content in ilmenite or rutile ore and the ore price. If you look at "ruidow.com" you'll see a spread of landed (port, CIF and after tax) spot prices in CNY and the difference between (in CNY) say 38-40%, 46%, 52%, etc, with different characteristics and finally rutile 90%+. The cost of processing a lower grade ilmenite is roughly 5-6 times of a high grade rutile (in shipping, energy, waste, etc), hence rutile getting 5-6 times the price per tonne, not exact, but you can see the prices for yourself. The price goes up above linear as the TIO2 content increases, and nearly but not quite parabolic as you get closer to 95%. 46% finished ilmenite product (not HMC) probably has you in the USD 186 bracket, landed, but since that is after transport and tax your equivalent FOB price is probably closer to ~ $155/t. If you manage to mine for $100/t which could be optimistic, your prospective EBITDA is 440,000 x 55 or $24.2m before you pay interest, bank loans, taxes, royalties, shipping and other fees and dividends. There's very little meat on the bone here.
Let's discuss the relative merits of the grades then. Not withstanding Dundas has a higher proportion of THM in HMS which would help keep the mining cost lower on a per-tonne basis (if you ignore location, total volume V total cost and other issues), the end result is still a 46% ilmenite product with no co-product credit. Iluka has various mines which have both high zircon and natural rutile credits, so off prospective lower THM in HMS still have far-far higher value product per tonne of HMC produced. They also vertically integrate most of their ilmenite to produce synthetic rutile. Base is similar, Sierra (owned by Iluka) similar, and KMR, not strong on rutile and not vertically integrated, but co-product revenue accounts for 30%+ of total revenue from a producer with lower quartile cost per tonne and 7% of the merchant ilmenite market. KMR also adds 43,000 tonnes of new concentrate product containing a mix of secondary zircon, monazite and other minerals (probably a small amount of recoverable REE) for FY 2019.
It will be very hard to have any further sensible discussion on this without detail of the required capital, the unit costs, and final product (HMC or finished ilmenite product), loans or capital required, and other detail. So far investor appetite for Bluejay seems to have been stimulated by claims of a vast estate of resource with no detail of project economics. I vaguely recall seeing an estimate of $60m capital previously. Good luck with that. This is analogous to an AIM oil or gas play with vast claims of resources but no financially plausible way of extracting it and getting it to market.
On product, KMR has high TIO2 content (52%-58% versus Bluejay 46%) with iron (30%), hence, for example, supply to Eramet (Tizir) for processing of both TIO2 and iron in Norway (for example). KMR also claims a low level of deleterious mineral content. Ilmenite frequently occurs with high levels of iron, hence prior issues with China producing ilmenite bi-product as a result of iron ore processing for steel. It is not special, it has been a problem in the market. Tizir produces both titanium slag for the pigment industry and iron pellets for the steel industry from processing ilmenite.
I'm not seeing what is earth shattering about Dundas at all with the exception of bold claims in investor presentations about resource and grade, absent any regard, as I said, for /project economics/. It could go to explain why when the likes of Iluka, Base and other producers show prospective future supply projects in their presentations, Bluejay is not getting much of a mention.
bucklerfern - in ordinary circumstances I would agree with you but Bluejay's sands are not those of Kenmare, Iluka (Sierra Rutile) or Base.and the market is for those companies which require very high grade ilmenite which will give those companies with a high grade end product for titanium with also high grade iron.
I am not critical of your opinions, but with respect, you have missed the real point of Dundas.
P.S. This is /all/ about project economics, not resources. There have been many mines built and profitably run because they have feasible project economics, without the scale of resources that are present at Dundas. A key feature of Dundas among HMS projects is no mention of Zircon, Rutile or other mineral credits. In company presentations I see the resource being called out but no mention of the prospective cost of production nor prospective selling prices.
"MMs" manage supply and demand. They don't generally take positions and they don't drive a stock, as such. Like the casino they're interested in the bit in the middle, the spread. Brokers drive a stock, if they feel it is in the interest of their clients (and that can work for and against regular punters).
Difficult to see how this is going to work. For a finished product, they need dredgers, wet concentration, mineral separation, and possibly roasters. They also need storage, mining camp, shipping facilities, etc. They need funding, probably several hundred million. Massive fundraiser an/or debt.
Given it doesn't look like a year round operation, they either sell concentrate to an upstream processor, or will need facilities elsewhere that can operate year round. If they just ship concentrate that needs to be processed into finished product elsewhere, it would probably be significantly lower in value that current ilmenite market prices. If they have MSP/upgrading somewhere else, that's additional shipping, handling and processing cost.
Given this is an ilmenite only operation, at current market prices it would be tough to actually operate the mine, say at revenues $70m revenue p.a., also cover all costs, pay investors dividends, and manage the amount of debt required to make it happen. Lenders will be paid before investors.
All other things considered, with investors back of the queue, it would be hard to see the justification here for participation in a capital raise, or hard to strike the balance between capital raise and debt.
I imagine when the PFS is published, it could contain some wildly optimistic assumptions in order to make investors smack their lips. Anyone looking on needs to be very tuned in to the moving parts.