VML – Vital Metals | Aussie Stock Forums


Lol, not much action on this thread lately!

This companies presentation was one that impressed me at the RIU 2008 Explorers Conference in Fremantle WA recently.

Flagship Project: Watershed tungsten project

12 month high: approx 98c

current price: 53.5c

VML have been aggressively drilling out their Watershed project in QLD, and announced a maiden JORC resource in June 07 21.8Mt at 0.26% WO3 for 56,000t (indicated and inferred) of contained WO3. While modest in grade, if Watershed goes ahead it will be a significant global producer and will account for 6% of global production. VML are confident that mine life will be in excess of 10 yrs. Significant exploration has been continuing in the meantime, with a new resource due in April 08.

Labour supply should not be a major issue, with the proposed mine located less than 100km from Mareeba. 132kV power supply from main road, 23km away. Feasibilty study due to be completed Aug 08, with production scheduled for late 2009/2010. The capital structure is quite tight, with 106M shares on issue and the company is reasonably well funded with $7.5M cash on hand. VML also have two other prospective, if less advanced, projects prospective for tungsten and moly in WA, Mt Alexander and Mt Mulgine.

Strengths:

– Targeting a relatively straight forward open pit design.

– Reasonably straight forward geology, ore hosted in a series of steeply plunging vein ‘swarms’.

– Market reserach carried out by VML indicate tungsten supply will continue to remain tight, due to curtailing supply from China.

– Recent forecasts indicate tungsten prices set to exceed US $300/MTU.

– Metallurgical and optimisation studies well advanced.

– Native Title negotiations well advanced.

Weaknesses:

– Modest grade.

– Thin international market for their product.

– Extreme difficulty in obtaining finance for specialty metals projects, for the abovementioned reason.

– Debt financing from end-users such as banks while creating less dilution for shareholders, can lead to construction delays and restrictions.

– Commodity risk if tungsten price falls.

Verdict:

Have we found the floor at approx 53c?…not being a t/a myself, would require some input from other members. If debt financing proves difficult, VML may look for a JV partner to help fund offtake. In all cases, moly and tunsten projects in Australia have been hit by delays across the board, although VML are advancing their project at a decent rate, and imo the outlook appears promising, I think I’ll place them on my watchlist!

Additional feedback very welcome.

Cheers

jman



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2019 Billionaire Club Co LLC. All rights reserved

Chat
Loading the chat ...