In my opinion Lochivar looks like it may hold great potential if Gary can secure a strategic partner to get this project towards production.
We have about the same amount of cash as JAL after our placement, but much more work to get Lochinvar to the same stage as Crown Mountain. We will still need to prove a reserve with further drilling, which i believe management have found a shallow seam which they wish to explore, to increase our current resource.
Similar NPV with a lower rate of return, but NAE has a cheaper operating cost, which will be more viable in a low demand market if coking coal prices don’t stay at current levels.
I believe NAE’s project looks more viable then JAL’s but will need more work in the short term, although are both looking at commencing production around the same time. JAL has a EV 10.7 times higher then NAE if we just base off the current coking coal projects. JAL holds a 90% interest in their project compared to our currrent 100%.
If anyone would like to provide any opinion as a comparison between the too companies or any other junior coking coal companies, i would like to see how our project compares as it doesn’t seem as if our market cap can be justified at these current prices.
NAE Price at posting:
0.7¢ Sentiment: Buy Disclosure: Held
