High Grade Ore, page-14

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frader

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06/03/17

13:50

Post #: 23126600
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Originally posted by That Fundamental Guy ↑

Liquidity is starting to pick up nicely. Frader - is this still on your watchlist?

I think that CAP may have timed this very nicely and have reasonable prospects of this mine going ahead given:

* the current support for iron ore price,
* demand for higher grade iron ore (keep an eye on stories on hot copper home page re demand for higher grade iron ore as there have been a few recently),
* existing infrastructure reducing risk and time to production, and
* current low interest rates improving funding options and NPV.

Investor presentation released today has target margins per tonne of US$50 to US$70. But at a conservative AUD$40 per tonne and 10Mtpa, that's $400M per annum.

I assume that CAP will need to sell down its percentage ownership (currently around 60%) to get into production. Even if CAP retains 10% that's a conservative $40M per annum with a long mine life.

I acknowledge that CAP is still a long way from being a producing mine, but its only real hurdle now appears to be funding - and given current low interest rate environment and increasing demand for high grade iron ore, I feel the funding hurdle is starting to get a little easier to get over.

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@That Fundamental Guy .. Still watching this. Could explode if a partner is found... I wonder if they are close? It would increase 10 fold if a development partner is found. You are correct in saying the only real hurdle is funding. If that is achieved, great things to follow.

Do you take a punt that funding will happen? That is the $1mil question!

CAP Price at posting: 7.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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High Grade Ore, page-14

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