Panther

Is this fair?

A massive update in the week for large holding STRATEGIC MINERALS. The update confirming this is Europe’s highest-grade undeveloped tungsten deposit (based in the UK) and a lot bigger and a lot more valuable than expected. Some points from the update: 1. The 2020 scoping study told one story and this new one blows it apart. The NPV surges from $128m to $1.54bn and is driven by two thing: a much bigger resource (2.4x more mineable tonnage) and the tungsten price that has moved to $1,200/mtu in the base case. If one uses the upside case at $1,800/mt then we arrive at a mind blowing after-tax NPV of $2.71bn and an IRR of 55%. Pricing today though sits at $2,500–$2,800/mtu, much higher than even the upside case. The economics are exceptional vs the market cap with Capex to build it at $109.7m. Market cap at time of writing? £115m 2. The resource grew in EVERY direction +49% tonnage. +31% tungsten. +55% tin. +30% copper. Silver also confirmed. 3. Mine life nearly tripled from 12 years to 29 years. Again, huge, Not just looking at a bigger resource and swollen numbers but it changes the entire investment case, de-risks the project for any potential partner or acquirer. 4. Metallurgy improved too. Recovery rates on tungsten trioxide jumped from 72% → 85.8%. Better recovery means more revenue per tonne and ultimately better margins. A bigger resource but also much more efficient. 5. What’s coming next? Right now infill drilling is underway and a new drilling contract signed with Priority Drilling UK. The campaign is fully funded and using one rig immediately, with the sole focus of upgrading Inferred resources to Indicated status (the classification needed to support a reserve calculation and unlock a PFS). Then before summer more rigs will be added.