I got the same message last week when meeting with them, remember the plant for stage 1 only costs about $10 mil, the remaining CAPEX is infrastructure. The board are taking a proactive step with with Ivanhoe and HuaYou.
Also potentially being able to send our concentrate to Kolwezi which is 50km away instead of Lubumbashi which is 377km. I know people are keen to get everything approved and up and running but if we can
reduce our transport costs by 1/7th of what they are currently stated it is a huge saving.
When speaking with Adam last week he alerted me to the changes in pricing at the back of the DFS and what changes to the copper & cobalt price does to our NPV.
The DFS had us at $82.9 million post tax;
View attachment 944584
If you take into account the current pricing of cobalt and copper;
View attachment 944590
View attachment 944593
We would be looking at about $115 million NPV on current pricing (Cobalt at $80,000 isn't even on the table!). Many are also predicting Cobalt to hit $100,000, which will only increase the NPV. I understand studies are never done at market rates but it is just a note for everyone to consider.
So essentially we are trading at a discount to our NPV at market prices. Currently at approximately $100 mil market cap with $11 million in cash. So current EV $89 million with a NPV of $115 million.
Pricing is influential on the final figures but
extending the life of mine is far more effective when we consider total valuations. Lucky we had this out the other day from management on twitter;
View attachment 944620
I don't think management would be posting material like this if they didn't believe it was going to happen. I know some may say
"all management teams say this" but from my experience as an NZC shareholder this management team go down the cautious path.
A large drill campaign with the funds from Huayou can't be far away, probably being planned now to be honest
. Once we start hitting the our targets I'm expecting an increase in mine life, which will in-turn increase valuation of our deposit.
When you consider we are already trading at a discount, have a proactive management team setting the company up well by not jumping at the first opporunity and look to be extending our mine life, it is impossible (in my view) to find a better Copper and Cobalt play on the ASX right now.
