Thats ok , a statement with little qualitative support just an opinion, which markets care little about opinions mine yours or anyone.
but for what it is worth here is my opinion low risk and high reward (nope I cant hear the market acknowledge it heard it). but now the analysis part.......
PFS coming out shortly as announced by company Q1 '15 , previous announcements demonstrate increasing grade, recovery and size of the ore body. economics of various analyst reports indicate a circa $800M NPV or $500M post tax for those of us that typically deal in the those figures, supported with around $100M p.a. earnings. Ideally the PFS should indicate some economics of the project which the company has yet been unable to disclose themselves mainly due to recent ASX regulations with resource stocks reporting projects in $$ without certain level of measured resource.
all funding is done until a Bankable FS is due in Q3 2015 which only leaves CAPEX raise for the mine of probably less than $200M, using norms likely 40% equity 60% debt, leaves only $80M in equity half of which Cradle does and the Tremont do the other half.
It IS the most advanced stage Niobium project worldwide and that is only competing against one other player globally (Niocorp and they only are going to release a scoping study April). Niobium is an increasing demand metal for HS Alloys as evidenced by the stable price over the years unlike almost every other commodity price which has dropped like a stone.
only 3 players worldwide making this stuff in a market that is $3B p.a.
Compare this to the buzz industry of graphite stocks which have seen big quick rises in SP only to be followed by the equally same drop in SP (a number of stocks I could mention on the ASX alone), why the up then the down rather than sustained highs?
Graphite is a market 1/3rd the size of Niobium, its small about $1B p.a.
Graphite price has dropped 50% since 2011 (that is going to scare away big investors green lighting projects), one reason for the drop in price?.........
too many junior players in this industry reporting ore bodies, very little of them have hope of production, funding is difficult, investors/banks dont want to pour money into a saturated market that can't soak up the increased supply because the demand is not growing by anywhere near the same amount, how do these new players get offtake agreement (crucial to getting mine funding) when there is already too much supply (alas iron ore industry). They will need to undercut the existing producers which then causes a slippery slope down in price of the commodity even further.
graphite stocks of 2014 have been great trades not investments due to its industry, they are high risk low reward.
CXX Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
