Good Morning once again,
Kefi Minerals (KEFI) came out with update on the
progress Definitive Feasibility Study (DFS) and financing. Amazingly,
the DFS is starting to look "slightly" different from Nyota's DFS all those years back in December
2012. It will certain be interesting to see how the company has got to all-in-costs
(including operating, sustaining capital and closure) of c. US$783/oz
(excluding initial investment). Based on what was previously suggested all in costs were circa $900/oz. so the $783/oz will be very surprising!
We'll await with patience on the full update next month (?).
If the headlines are near, it could be a very interesting time for Kefi's Tulu
Kapi, unless of course there's a JV which removes a lot of the potential for
the long-suffering Kefi holders, although this is believed to be very unlikely, its still a risk as KEFI still need their share circa $50m for their equity contribution.
From the RNS, as it appears to be copy and paste day!
- After-tax NPV of US$112 million assuming an 8% discount rate and gold price of US$1,250/oz and US$73 million at a gold price of US$1,150/oz
- The targeted funding mix is for up to approximately US$100 million from debt-style financiers (conventional project financiers along with the structured supplements thereto) and the remainder from financing arrangements with project contractors and/or equity from investment institutions at the project or parent level
The draft of the 2015 DFS is now being reviewed by the
short-listed secured lenders' independent technical consultants to ensure
plans, and substantiation thereof, are aligned with financiers' expectations.
The Company's management is also preparing final tender documents for the
mining operations and for construction of the process plant and infrastructure. Short-listed
project contractors have indicated willingness to participate in project
funding.
Continuing on from EMC - Mio Woodstock, was something Roger Bade highlight
yesterday. Roger's conducted more work on this but limited time its easier to
cover his words yesterday. Interesting the differing view on the returns on Woodstock,
which contradict my view of Hongxin Group's (potential/gossiped) interest
in the Woodstock asset.
Minco (MIO) - Reiterated BUY
The shares shot up post their Q1 results as they indicated
that a Chinese electrolytic manganese metal producer had initiated technical
due diligence at their Woodstock manganese project in New Brunswick, as Minco
looks for a partner to develop it.
More academically, at end March they had US$5.43m of
cash, while drilling continues at their Buchans base metal project in Canada. A
breakdown of the various carrying values of their projects was provided, with
Buchans topping the list at $5.921m, Woodstock $3.659m, the Pennines $2.494m,
for an overall total of $13.412m. From this portfolio we only carry a valuation
of £1m for Buchans, thus illustrating the potential for exploration success
throughout their portfolio.
Their June 2014 compliant Preliminary Economic Assessment
on Woodstock indicated potential returns way below our criteria for excitement,
hence we look forward to be pleasantly surprised if they find an interested
Chinese partner.
We still think the main value is to be had in their 2%
Curraghinalt royalty and continue to value this at around 50% higher than the
current share price.
Get well soon Roger, one hopes the tonsillitis doesn't turn into Ebola!
Its hoped I can come back to the Sierra Rutile (SRX) announcement for Sembehun Dry Mine scoping study. Without digging through paperwork its hard to establish their assumed market price, but the returns suggest it may be a tad bullish. SRX's pre-feasibility study is due Q3 2015, so plenty of time to get there before the market! One assumes they utilised the consensus pricing from last year that was rather bullish at $1/t+ Edited $1K/t+, when sensibly consensus suggested Rutile's low is around $800/t. More when there is time.
Although admittedly, the economics for SRX's Gangama Dry Mine even at the $800/t are compelling, at circa £150M market cap SRX "may" just have some prospects good prospects. With the rainy season upon SRX, one hopes the bulk of earth works were completed for the Gangama Project (Sierra Leone rainy season June-November). SRX have Wayne Venter joining from Norilsk Nickel on the 1st August 2015, as chief operating officer. Certainly more potential...than previously.
SeaEnergy's trading update "may" not be as bad as one first thinks, perhaps a little knife catching! Although SEA's may be a little optimistic of "when the time is right" to divest/flog their Lansdowne Oil & Gas plc (LOGP) might be a long way off! With Providence's Resources (PVR) issues, perhaps a bird in the hand is worth.
Atb Fraser
