more director buying at 10 cents, page-6

Pete,

I would think a 250Ktpa mill would set you back AUD$60-90M, but the operating costs would be quite high, so I'm not 100% sure that the Barbara ore body is really a screamer. I would think they will be seeking to explore more - it is hardly closed off along strike.

I don't think IVA would neccessarily buy Kalman, or Kings Minerals, or Syndicated. It is further along in the feasibility process, and starts at surface (as you know, Merlin starts deeper and goes deeper still). I can't see that being such a big commercial advantage that Friedland would want to make a move right now.

If KMN and SMD can fund the BFS and push it through quickly, its arguable that they can actually beat IVA to production even if IVA has a much greater avalanche of Friedland money behind it. It is interesting to speculate that were KMN/SMD to get into production based on the Mo-Cu in Kalman alone, and take the rhenium as a freebie/bonus, then the new supply of rhenium from the Kalman ore would likely trash the world market in rhenium anyway (being 160KOz pa, or around 10%).

If I were Kings Minerals or Syndicated, I'd ignore the rhenium and get down to moly. 0.1% moly is damn good - Spinifex ridge was proposed on a tenth of that grade.

You're right, SMD won't get diluted pre-BFS because KMN is pulling all the weight. Post-BFS it's up for 20% of what could easily be $40M in proect equity - $8M - which is still a fairly big ask for a company with $3M to $4M market cap and no clear way to leverage in on the results (given its a 20% minority interest on the balance of contained ore).

Thats not to say it isn't impossible for SMD to avoid further dilution and get the equity done. I had a stab at doing a model for the Kalman Project, and although I haven't done it from a SMD point of view, its worth a huge NPV ($300M plus) to KMN on its 80% basis. This would give SMD's share an NPV of $60M for a 3Mtpa mine.

Ultimately, SMD could sell out its equity prior to the BFS stage and retain a royalty on its share of the ore - possibly $1 a tonne or something like that, which would see it get $1.5M p.a. for nix, with an up-front splash of cash of up to $10M to buy out its 20%.

I guess I just don't like buying in to companies who own only minority positions in deposits. it inevitably ends up being an income stream and nothing else. Kalman can provide a stream of dosh to bankroll the other projects. Right now, SMD doesnt have anything ball-tearing I'm afraid.