The TNO resource itself stacks up very well with TMT and AVL, similar high grades... possibly even better in some of those pipes. With BMN nearby it's safe to assume mets will work out okay and high purity V2O5 is commercialy viable.
Massive size will eventually have a very significant voice on the world market. At the time of PFS which I'm sure management would hope to be in 2019 the NPV will be a product of the margin per pound and volume, not absolute size.
On a like for like basis you'll expect to see a similar number to the incoming AVL PFS (Dec/Jan) and TMT DFS (May/June). $2b+/-, is a reasonable figure depending on how what value you use over the mine life. Somewhat generous to AVL with it's smaller volume but they are putting much of their time and effort into post mining value adds which we could include here.
Still cheap... a much lower enterprise value per tonne of resource than next best TMT, even after dilution from the project purchase which needs to be factored in.
EV's
AVL $78m
TNO $38m
TMT $35m
I prefer the EV / assumed NPV measure as a value rating which leaves TNO very close to TMT's 1.75% and far cheaper than AVL at 3.9%. Again, you must include the purchase dilution to compare apples with apples and it takes a while to add those issues up. EV jumps from $20.8m to $37.7m once you account for those shares yet to be issued to the vendors.
So value wise TNO initially looks good but the issue is the timeline. DSO is being touted by management as a way to close the gap and generate some cashflow to get to plant construction. A great concept but we'll still need a JORC, PFS, DFS, ML, several capital raises, an offtake agreement and mine built to get there. A year or two behind the Gabba plays if it goes to plan. What's the V price doing in 2023? Not sure.
I researched and traded TNO this year and think it's got the potential to get there, but it's third in line at best and relative to TMT not priced appropriately for the time discount and V price risk. If V is still at $30 in 2021, TMT and AVL start life with monster profits not worth quoting here. TNO doesn't participate in that in all likelihood, that's the difference.
