Ferro-alloy Resources Share Discussion Threads

[cyberbub] 17/3/2021 08:02

JB I suspect exactly that, as I said in my post last night: now they have the cash needed to develop the Phase 1 full mine, the small plant becomes less important financially. So they are going to get the HV power connection installed to stabilise it, especially since this power supply will be used for the full mine. But expanding the small plant is no longer necessary. They just need it to keep their skilled staff, and to refine their processing steps for the full mine.NAI

[sos100] 17/3/2021 07:43

jailbird - you got to give up this habit of giving share price predictions , especially once you've sold out :)

[jailbird] 17/3/2021 07:30

CybAny thoughts on why the pilot plant is only going to produce 80t per month once power line and furnace are in .That is almost 50% less than planned . Cannot see how that will bring much cashflow in .Looks to me chairman has scaled this back , and focus on the main mine plant needed for phase 1

[jailbird] 17/3/2021 07:26

Timber this BFS will only cover Phase 1.

[jailbird] 17/3/2021 07:06

I think it will settle between 20-30p once all the dilution comes to market .MMs will look to offload their allocation . Remember at 25p post dilution is $150mI would expect mkt cap to value it at % of NPV phase 1 Phase 11 is probably 4-5 years away

[cyberbub] 16/3/2021 22:08

It's said that credible junior miners with their mining licence and all their paperwork (but before closing their financing) typically have market caps of 20% of their NPV.

Ferro's NPV is 'at least' $2bn according to the CPR - with an upper estimate of $3bn. But let's say $2bn. 20% makes $400M = £300M. Divided by say 450M shares = 67p.

And that's before financing. It could quite reasonably be said now that the equity component of the financing is arranged, that the debt portion should be pretty straightforward to confirm. So what could we be looking at going forward with the share price in the next few months?

I can't predict the share price short term, but I honestly don't think tonight's close of 27p is where it will be in a few weeks' time. And I don't mean down :-)

No advice intended of course

[bygdennis] 16/3/2021 22:05

Only just scratched the surface as FAR as I can see!! It says so!! This has legs and the big boys will be all over it!! Bigger things coming here, Big profits too!! Watch!
No red tomorrow!!

[the stigologist] 16/3/2021 22:05

Old article on Mick Davis

Xstrata's big boss with bigger ambitions

[cyberbub] 16/3/2021 21:20

Thanks kaffco.I'm in RMM too, fairly heavy. I must say I think there's probably still quite an overhang to work through there, but it's definitely significantly undervalued so I think it will pop at some point...

[kaffco] 16/3/2021 21:06

cyber,some good posts there and sums things up well :-) i was fortunate enough to load up big at 10.2p here so well pleased with progress.I said a while back that FAR and RMM will both be multi-baggers this year,ferro alloy has started its ascent today and i reckon RMM is close to a fabulous re-rate (maybe even tomorrow) was tempted to sell most here today on the rise but in the end hung on to 60% :-)

One word NICE :-)

[cyberbub] 16/3/2021 20:51

For newbies wanting to know where the existing 'small' plant is, I did some detective work a couple of months ago and I am 99.9% certain that this is it:



Doesn't look like much - not clear when the satellite photo was taken, quite possibly years ago, somewhere remote like that!

But you can see the enormous Vanadium deposits just to the south of the site - the 'black shale' referred to in the various publications. They're mostly on the surface or at shallow depths - another reason the mining cost is so low!!

And you can see the great location right next to a tarmaced road, just 70km from Shieli, an international railhead to Europe and China. As we know there is also an HV power line running very close to the plant, which can't be seen in the satellite photos.

DYOR etc

[cyberbub] 16/3/2021 20:36

Indeed JB, that's what I kept saying, despite its fall the company still had a market cap of £35M, so it could take a level of reasonable dilution which some other micro miners couldn't. Plus the very low capex means that they only needed a smallish dilution to be be able to raise debt.

Don't get me wrong I'm still a bit disappointed with 9p, but Mr Market is usually harsh, and Mick Davis has driven a 'hard bargain'. But there is still only 50%-ish dilution which is not too bad. And the upside is that *all* of the funding (right through to Phase 2 completion) is hopefully now 'sorted', and it's full steam ahead!

The other benefit of having VRB on board is that Mick Davis will definitely have made sure that the 'draft' BFS is fine and with no unpleasant surprises, before investing millions. It seems clear that it's now just a formality. Sure there may be a few tweaks to the business case or whatever, but it must be fully viable for debt funding, to have enabled this large equity investment.

No advice intended

[cyberbub] 16/3/2021 19:01

Mesb LOL, yes you seem to have done the trick! I wrote to the CEO and also suggested a fundraising, but only £3M for the BFS and small plant completion! Looks like he decided to 'go for it' in the end!

For FAR newbies, the "80% complete" in the interview today refers to the small existing plant, which produces vanadium from waste concentrates. Nevertheless it provides a useful cashflow to FAR, which is something most junior miners don't have. The small plant has also allowed testing and development over the last few years of the innovative (and now patented!) processes for when the company is mining ore from the adjacent massive Vanadium resources.

It had been intended that the small plant's cashflow would support a debt funding package for the Phase 1 main mine, allowing low levels of dilution to shareholders. However the equity funding announced yesterday makes the small existing plant less relevant. In effect the company have accepted a much bigger dilution than they had originally planned (but still not excessive IMO at about 50%), in order to progress and build the large main mine project as fast as possible. Clearly our new strategic investor wants that too!!

Phase 1 of the mining operation (I believe it will be in operation in 2023) will yield $100M in revenue p.a. - and the amazing thing is that due to the valuable by-products in the ore, the actual Vanadium is free!!! (This has been confirmed in the Competent Person's Report). Plus they have a tax holiday until 2026! So I would think they will be making *actual post-tax profits* of $90-100M for the first 3 years. This will fund the construction of Phase 2 directly (no further debt or dilution), which will quadruple output!

What will the market cap of a debt-free company producing possibly $400M of reliable profits each year be, when Phase 2 is in operation probably in 2025-26? Assuming 500M shares in issue, I would think at least 500p per share. Will LTH's hold on that long? I hope to still be here anyway!

If all goes well, this mine is going to be an absolute monster!

No advice intended...

[zb27] 16/3/2021 18:34

Ha Richard, funny, your desperation is quite aparent. Scared this is going up again tomorrow! Well I would take an easy guess that this will continue on a steady upwards trajectory now. This is on the radar of the big boys. Basically if you wanted the backing of anyone, you pretty much cant get any bigger than ex CEO's of Xtrata and Anglo American! With Sir Mick also taking the role of Chairman! They will bring all the funding, contacts, experience to drive this forward towards stage 1 and stage 2, or sold off to one of their chums at a global mining company at a huge premium! With the Green/Battery revolution, everyone will be interested in the largest and lowest cost vanadium mine in the world. You need to do a little research to see how special FAR is and why its attracted superstar investors! For all long term investors sit tight and reap the rewards. NT to buy all the time, this will head only way way. Well done to all LTH. Ignore the obvious derampers, theyl be deramping all the way upto £1+ and beyond.

[bygdennis] 16/3/2021 17:27

Only just scratched the surface as FAR as I can see!! It says so!! This has legs and the big boys will be all over it!! Bigger things coming here, Big profits too!! Watch!
No red tomorrow!!

[mesb48] 16/3/2021 17:21

it's less than a month since i wrote to NB encouraging a "bigger/bolder funding plan". i'm now thinking who i should write to next!

[jailbird] 16/3/2021 16:46

A lot of hot money in this now .Let's see what happens over the coming weeks I hope the other miner I am performs the same way considering it is further up the project phase .FAR will just need the debt in place as most if the equity dilution has been agreed .All about the BFS now .Think ppl will take heart the new Chairman will also get the pilot plant going.However I see it only mentions 80t per month and not 150t per month as originally stated