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road to DFS, page-37

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7benson7

598 Posts.

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24/11/18

12:16

Post #: 36626745
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Originally posted by Therookie88 ↑

so between now and late January/early feb when the resource upgrade is due out, we should be in discussions with offtake partners and should be commencing our pilot scale testwork remembering we are almost in decemeber. so as @alecfra said offtake discussions could be happening right now, I wonder how close this is and if the partner will be selected to work in collabaration with TMT during vendor pilot plant bulk test work... bottom line is this is prob the most exciting time to be holding TMT in the companys short history. general market conditions are terrible I know but the vanadium market conditions have never been better, no matter what the dow does the structual defecit for vanadium wont change new supply has to come online to meet demand, WE are in pole position!....possible reward from the next few months of holding could be huge... i don't see any long term downside from a 31million market cap considering our fundamentals.

GLAH hoping for a strong bounce tomoz

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Originally posted by 7benson7 ↑

Agree with your point on SOI. CR dilution is the single biggest factor in future SP. More important than V2O5 pricing and greater impact than cost of production or capex. The interesting thing about this variable is that it seems to be driven by commodity demand. Successful projects can realistically raise construction funds at a discount to of anything from 90% to 20% of NPV. 40 - 50% seems to be a range for most I've looked at.

PLS are the leaders in most things you can measure. In April '16 they had a stage 1 PFS, plans for a stage 2 and DFS fully funded with $12m in the bank. NPV was $407m at very conservative price estimates raised their first big tranche for construction, $100m to instys + SPP at 38c, a new valuation of $425m based on the SOI growing to 1.11b. This was obviously an outstanding achievement and without a price pull-back simply built $100m of MC. Prior to that PLS was trading at 80% stage 1 NPV (15% stage 2) without a BOA or DFS. It was all about timing and sentiment for Li though, the market had rightly lapped up the story and 8 MOU's in place didn't hurt. 2 months later BOA for 40% of stage 1 production raising another $17.75m with 574m shares at 50c valuing PLS at $590m, more than a conservative PFS NPV and 27% of most recent stage 2 NPV which KB would have been selling at the time.

AJM raised at 20c around the same time back in '16 at 50% of NPV which I've mentioned previously. AUZ have non binding agreement at $375m valuation which is 50% of a DCF val based on Ni/Co pricing when signed. AUZ may well fall over with the massive fall in Co price since but all of these agreements are good examples of offtake equity given at discount to a determined value rather than market price.

Low SOI is a nice advantage, currently offset by a very low MC. We'll need a couple of tranches of equity to then issue debt imo. One with a long term supply agreement up front would be the perfect start. With 98% and 99.5% samples well received and the coming resource upgrade already well understood, a BOA equity contribution valuation imo should be at a discount to DFS NPV circa $2b.

Our $35m EV is currently 1.75% of our conservative PFS NPV. The value of securing supply to an end user is far more significant at this point than their upfront dollars to kickstart a re-rate towards full value. This is the kicker.

A moderate $20m investment for 5% - 10% of the company is absolutely the minimum asking price for any significant portion of our 13Kt. This wide range valuation of $200 - $400m is only ~10-20% of our likely DFS NPV giving this partner excellent value while locking in their future.

$20m cash is a quick fix to market cap but the uplift here comes from the low SOI, only ~95m fully diluted. This small stake would then only require the issue of 5 - 10.5m shares... at $1.90 (10%) to $4 (5%) per share.

There would be more issues, another $150 odd along the same lines before we could issue debt to fund the plant but the point here is that this could happen at any time.

We're the only uncommitted Vanadium deposit on the planet with a PFS and V2O5 samples tested by the major players. It's a big deal to negotiate but we have time on our side and an end of January NPV update serving as a motivator for these parties. The world needs rebar. They can't do without our product. This BOA stuff sounds blue sky but has to happen in some form or another very soon.

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Interesting looking at that timeline and thinking about where SP will land when binding offtake is secured.

Our previous yardstick... the big brother... will then be the one measuring themselves as a discount TMT's market cap.

We are very, very close to being the ASX leader in this space. When that happens and the next leg up in V2O5 pricing begins... it's gonna be a good '19!

All onboard throughout this eventful 2018 will be rewarded for choosing well and sticking tough.

Pullback seems to be sector wide with TMT being lumped in with other plays who have either died a natural death (KRC) or dropped the ball running wide open into space (the unlucky bros).

Investors appear doubtful that this Vanadium stuff is real and not some cool sounding pump. There's one thing thing that'll convince the market... BOA, coming soon.

TMT Price at posting: 45.0¢ Sentiment: Buy Disclosure: Held
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