Valuation
I had promised this to a couple of people (reluctantly, given the inherent uncertainty in any pre-drill valuation of a property). It should be used as a yardstick only!
This is the background:
Message 8755749
Given Tanco and Pakeagama Lake have similar mineralogy (both containing spodumene, cesium, tantalum beryllium and rubidium), pre-production Tanco numbers are noteworthy:
TANCO Pre-Production:
1. Tantalum
2,071,358 t @ 0.216% (2160 g/t) Ta2O5 = 9.8 million lbs.
9.8 million lb @ U.S. $32/lb of contained tantalum = $313.6 million
Note: Tantalum concentrate (grading 38% Ta2O5) sells for approx. $25,000/tonne. Greenbushes Li/Ta mine production is based on a Ta grade of 0.0256% + Wodgina stand alone Ta mine was brought into production based on an average grade of 0.05% (300 ppm or 0.03% is considered very significant and would attract key industry players).
2. Cesium
350,000 t @ 23.3% Cs2O (concentrate grade is 24%) @ $1000/tonne = $350 million.
Note: 350,000 t represents 82% of known pollucite reserves worldwide, obviously it was enough to warrant Cabot Corp's U.S. $25-30 million investment in a cesium formate plant onsite.
3. Other
Spodumene/Lithium: 6,600,000 t @ 2.76% Li2O
Beryllium: 800,000 t @ 0.2% BeO
Rubidium: 100,000 t @ 3% Rb2O
Based on the Ta and Cs zones above, excluding any value given to Li, Be or Rb, the pre-production in situ value of Tanco was in excess of U.S. $660 million = Cdn $1 billion (at today's exchange rate).
Comment: HLM's market cap is only $3 million, so its fair to say the current stock price is undervalued (even at this pre-drill stage). If the surface indications to date bear fruit at depth, we could be in for quite a run! I doubt it would take long before Cabot Corp. would be knocking at the door (they and others already have an ear to it). If its a Tanco-equivalent valuation, my estimate is a stock price of $5+.
So much for speculation - its back to the news after this post.
DRT |
