EE1 6.67% 1.4¢ earths energy limited

[MEDIA] Cradle Resources has released a positive Pre-Feasibility...

  1. 174 Posts.


    • Cradle Resources has released a positive Pre-Feasibility Study (PFS) for their Panda Hill niobium Project in Tanzania.
    • Key results of the PFS included extending the mine life to 30 years, initial capex (inc. working capital) of US$195m, cash costs of US$22/kg and an improvement to the mined head grade (LOM 0.54% Nb2O5, 0.68% Nb2O5 years 1-10).
    • We have slightly increased our valuation from $0.53 to $0.54 per share based on the results of the PFS and a 2Mtpa operation.
    • However, as highlighted in the PFS, Cradle will focus on a smaller 1Mtpa operation in the DFS.We have therefore also examined a scenario that examines a 1Mtpa operation for the first 5 years of production, before increasing to 2Mtpa operation. This scenario would see our valuation slightly drop to $0.51/share.
    • However, we believe the potential benefits of this scenario will out weight the slightly higher valuation.This scenario would see a reduction in the initial Capex as well as reduce the offtake requirement (offtake is essential for any debt financing).Both aspects will make debt financing more achievable and ensure the current timeframe to production is maintained therefore beneficial for shareholders in the long term.
    Last edited by admin: 31/03/15
 
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