Regardless of what the chart says and technicals (sorry techies
Here's my fundamental view, so if your in it for the medium term this should unfold
BTW RHI now $3 = $120m Current EV = $7.60/t Fe!
CUL
Mkt Structure
Shares
475m
Mkt Cap @ 5c = $25m Current
Mkt Cap @ 10c = $50m Target 1
Mkt Cap @ 15c = $75m Target 2
Mkt Cap @ 20c = $100m Upside
Cash
$2m not alot, but nearly all of its projects are funded by JV's so it doesn't need cash
Projects
Catho Well Iron Ore, 30% Carried, West Pilbara
JORC 68Mt@55.4%Fe
Now CUL's main project is joint ventured to Australian Premium Iron which is jointly owned by AQA and Multi Billion dollar steel mills, they are firming up a large porject in the West Pilbara and are currently doing feasibility studies and although CUL's project is smallish it still represents 1/4th of the total project and as such will get into production, importantly CUL's deposit contains lower impurities and thus is required to blend with the other deposits
AQA/API have very very deep pockets and backed by the US steel Mills, funding and offtake will not be a problem,
Valuation
RHI 40m shares @ $2.50 = $100m, its asset 20% of 135Mt@58.5%Fe = Net 15.795Mt Fe, at $100m = EV of $6.33/ Fe t
So if we give CUL the same $6.33/ Fe t = 30% 68Mt@55.4%Fe = 11.3Mt's Fe = $71.5m = 15c CUL
Now the mian points are
1. This was a first pass JORC from 1 of 4 target areas, a look at CUL's ground position suggests some of RHI's Cardo Bore deposit extends into CUL's ground
2. API is backed by AQA and Multi Billion Dollar US Steel Mills who will provide funding and offtake
3. A feasibilty study is underway
4. A comparison to RHI suggest CUl is worth 15c on this asset alone!
Wyloo Dome Iron Ore, 20% Free Carried, West Pilbara
This project is in a JV with
FMG, thats right
Fortescue Metals Group, they are beginning exploration for Iron ore this qtr! The project is adjacent to Hamersley's 225Mt@62.1%Fe Metawandy Deposit
HUGE SPEC Appeal!
Gun Barrel Nickel, 25% Free Carried, W.A.
BHP is drilling 7 diamond holes in search of Nickel, the mkt will love the BHP link
Iriwn Bore and Mt Tate Nickel, 30%-35% Free Carried, W.A.
IGO one of the most famous mid cap Nickel players is exploring here for Nickel in a JV, again the mkt will love the IGO link
Forrestania Nickel, 20% Free Carried, W.A.
HNR most who like nickel will be familiar with the HNR story, their directors are famous for discoveries and its very good to see their main project is with CUL,
Gunbarrel Gold, 30%-35% Free Carried, W.A.
Newmount is exploring for Gold here
Duchess IOCGU, 30% Free Carried, Mt Isa Qld
MEP Minatatour are exploring for Cu-Au U and IOCGU type structures here although they are mainly working on Tunkilia with HLX
Uranium Projects Uranium, Some 30% JV's most 100% owned, W.A. S.A. and N.T.
Has about 40 liceneces in W.A. S.A. and N.T., could easily spin these off into a new IPO, I'd say they're worth 2c-4c to the company alone.
Summary
- The main Iron Ore porject worth 15c
- FMG JV adds 1c spec appeal
- BHP JV adds 2c spec appeal
- Lots of other JV's working hard to make a discovery, adds another 1c appeal
- The Uranium projects are worth 2c-4c in a spin off form
Total Value I see = 15c - 25c