Guys, my fundamentals for RMI got buried so I am reposting them,
Just like CUL, RMI should get towards my intial target of 15c
Techies that was a strong close, what do you see on the chart
RMI
Mkt Structure
Shares
430m
Mkt Cap @ 7c = $30m Current
Mkt Cap @ 15c = $65m Target 1
Mkt Cap @ 20c = $86m Target 2
TOP 20 = 52%
Substantial Shareholders
Sinom (Hong Kon Stell/Iron ore Insto Group) 13.4%
ANZ 8.4%
Mount Gibson Iron MGX 7.4%
Cash
$2m not alot so will obviously need more down the track
Projects
Wowo Gap Nickel, 100%, PNG
120mT@1.2%Ni + 0.1%Co = 1.7%Ni Equiv
Note that my research on Wowo Gap has found that based on all the historical work, the PNG government is confident to quote a JORC of
300Mt@1.6%Ni Equiv
Valuation
As its a laterite Project I'd say once the JORC is firmed up a $1000/t EV is appropriate (Note Spot $35k - $50k/t)
For now until we recieve assays and confirmation of the mineralisation I will use $100/t Ni EV
120Mt@1.7%Ni Equiv = 2Mt+ Ni @ $100 = $200m = 47c RMI
Now the mian points are
1. Although the current JORC has a low confidence level, detailed research of PNG databases has revealed a JORC of 300Mt@1.6%Ni Equiv is being quoted, so there is plenty of upside to the jorc, this in turn has greatly increased my confidence in the project.
2. Given the huge technical and infrastructure costs, a JV with a major is a must! = Farming out/down of interest, but see HIG, they sold a majority stake in Ramu (145Mt@1.5%Ni Equiv) to the Chinese so a JV partner shouldn't be a problem
Blackstone/Michael Hills Ni/Cu/PGE/PGM, 25% Free Carried by RDS, Musgrave Province W.A.
The project is 30Km's away from WMC's Babel and Nebo Nickel Sulphide deposits,
While its early stages, Patersons are highly encouraged by the work so far and belive that RDS/RMI are onto something quite promising here
Valuation
I like Patersons fully agree that the bulk of RDS's current mkt cap is attributable to these projects,
Hence a comparative valuation can be made
RDS 90m shares @ $1.40 = $26m for 75% Interest
Thus RMI's 25% Interst is worth $42m = 9-10c approx RMI
Argyle Iron, 75%, W.A. near Wyndham
JORC 17Mt@55%Fe
Unfortuantely this deposit is somewhat stranded and RMI will need to show a clearer path to development before I will value it properly,
However apparantly their has been strong Chinese interest in a potential JV, once one appears I will re value this project
Valuation
As stated, due to development uncertainty the project only deserves an EV of $2.50/t vs $5/t I was happy to use for CUL's
17Mt@55%Fe = 9.35Mt, 75% Interest = Net 7Mt's Fe
7Mt's Fe @ $2.50/t = $17.5m = 4c RMI
If a chinese JV or clearer path to development appears I will be happy to use $5/t = 8c RMI
Qld 3 Rivers Ni/Cu, 10% Free Carried by SRL, Greenvale Qld
SRL should have drilled 3 deep holes to test for NI/Cu sulphides, not sure where this project is at
Summary
- WOWO could be a company making project, remember JRV's run? 400% in a month based on its huge laterite Nickel Project
- The RDS JV underwrites/implies an SP of 9c-10c
- The Argyle Iron Ore Project adds 4c in spec value (8c once I see JV etc)
Total Value I see pre Wowo Gap rerating = 23c
After more confidence in Wowo = 40c+