Swami has uncovered plenty of crap out there, but has zeroed in here for a single reason and I can see why to be honest. I spoke with Bill about it recently and was very comfortable with the answer. But this reason IMO is a generalisation that has lead to him briefly looking into and pointing out a few things without going into depth. When I went into depth myself with regards to everything that Swami has brought up, I felt much more comfortable after looking into these (and bought on the recent dip). I always found very reasonable and IMO easily achievable solutions to the concerns raised. I may not be quite as cynical as Swami, but I don't think I'm too far off.
From my research into Vanadium explorers on the ASX this was one of 3 that I liked and IMO this clearly has the highest potential, even allowing for any sovereign risk from South Africa.
I remember one of Swami's concerns being the lack of water in South Africa (eg Cape town), however this location is the other side of the country and largely unaffected, dams in the area were at or near 100% cpacity such as the De Hoop dam, just a few km's away, which was constructed for mining.
Another is to do with China banning a certain type/process of Vanadium being produced, This was done for environmental reasons as the process itself isn't great with regards to the environment (which has nothing to do with doing it in South Africa). Plus as the company twitter account said, we will not be producing the steel it's associated with so this isn't even relevant.
Furthermore Swami has questioned the DSO market viability, when I look at it we potentially have 2%+ grades to dig up. This is likely much higher grade than what is being processed in the country (and most of the world), assuming we have grades say twice as high (we are more than that to most ASX), considering the V2O5 price is still going up it is clear that all production is at capacity, of course if current producers can successfully process our potential 2%+ ore, at current prices they could be gaining much more income. At current prices you would have to assume that there is more than enough meat on the bone for both parties to quickly come to an agreement. (obviously the drills have to prove the grades for this to become a possibility but I really like the chances here)
A recent one was to do with the structure of the deal and irony of waiting for the mining right to complete due diligence. Swami initially a concern that it looked dodgy as the mining right was applied for years ago with the previous owner. They simply take that long to be approved in South Africa and IMO this is a massive thing to have already and means that there will likely be limited V2O5 supply coming online in South Africa over the next couple of years. The mining right allows drilling (and mining). The structure of the deal needs to allow reward as progress is made furthering the project. There was a claim that the deal should be structured to give the shares at the end which is ridiculous, why would TNO want to spend money, time and effort to potentially end up with nothing if something doesn't go to plan.
ps - I still love you Swami, but really think you have this one wrong
TNO Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
