another theory
within the last 3 years NML has lost a significant amount of value and currently NML is only $74.7m worth.
so, what are the major stock catalysts that would justify a positive re-evaluation? for me there are only two:
1. the announcement of the operating costs of the DSO project
the construction process of the DSO project will continue at least till the end of Q2/2015 due to deferrals. in my opinion the operating costs won't be announce before the ramping up process will be completed. so, first operating mining data won't be published before the end of 2015.
empirically the very first operating data will be a small portion higher than the further ones because production process won't run perfectly, the machinery won't adjusted perfectly and the personnell will gain experience gradually. but the very first mining data will be very important for value investors that will put their focus on NML because you can rely on that data and you can evaluate future earnings/profits for that project. till the point when NML announces the official mining data with operating costs for the DSO project, NML will remain as a "black box".
2. the invesment decision of Tata Steel for the Taconite project
for me personally it is unquestionable that the fundamental facts of the feasibility study for the Taconite project will be positive and very robust as the pre-feasibility studies have indicated it. there may will be some customary cost inflation added to the operating costs as the pre-feasibilty studies are some years old.
i would speculate that 1. Tata Steel will finance the construction of the LabMag deposit for production and 2. Tata Steel will finance an initial production alternative of 5-10m tonnes/year to reduce the gigantic capex that was mentioned in the pre-feasibility studies of around $4-5B and to avoid the risk of additional, future cost overruns which at that high scale level could be extremely dangerous. If Tata Steel and(or NML will decide to build the ferroduct pipeline which would decrease operating costs extraordinarily they will need financing capacity for that.
we have to envision that Tata Steel is and will have a predominat position at both the DSO project and the Taconite project and NML is and will be only a very dependent minority JV partner. if the release of the feasibility study is deferred over months, it could be that Tata Steel defers that behind the scenes (only my unproven speculation!). only a few weeks before year end of 2013 NML announced:
""The TFS results are expected to be published in a news release and subject to approval by NML’s board of directors and Tata Steel management, before year end."
i don't think that NML lied or announced a total miscalculation regarding the releasing time period. i believe that NML anticipated it that way with the at that time delivered information from Tata Steel have indicated it. but somehow something unexpected happened and Tata Steel deferred the release. we shareholders have to realize that we only receive a small fraction of information that the management discusses. NML surely would have chosen others words than the above if they would have known that the release date of the feasibility study will be at least after March 2014.
in my opinion Tata Steel already has the final version of the feasibility study since 18 month or so. probably they might they introduced that final version to greater potential financing partners, but nobody made a positive signal (pure unproven speculation of me) and Tata Steel couldn't/won't like to finance the whole thing on their own. so Tata Steel decided to order the evaluation of production alternatives (of maybe around $2B for 5-10m tonnes/year) to reduce the initial capex and to grow incrementally afterwards.
i personally think that NML will get the approval to announce the feasibility study somewhere around the end of 2014 / beginning of 2015. within 4 month after releasing the feasibility study Tata Steel will have the time to decide for an investment decision. as the DSO project will need time to be self-sustaining and generating its cash-flow and (best case) profit, i can imagine that:
1. Tata Steel won't prefer to invest greater amounts of capital simultaneously in two projects
2. Tata Steel and NML are hoping that the financial/mining markets will stabilize/improve.
it could fit precisely: NML announced a stock buyback program. why would a mining company that is far away from being cash-flow positive and/or isn't operating profitably yet do that? they would only do something like that if the management would have known/anticipated that the value of their company will be some time significantly undervalued.
if the feasibility study will be released i believe that there will be a short-term spike in share price. especially daytraders will use the good fundamental facts for their speculation with the result that the share price won't be able to stay at the increased level. primarily everyone will longingly wait for the investment decision by Tata Steel. many people doubt that this gigantic project isn't fundable because of this huge capex. but at a smaller scale (reduced initial production capacity --> reduced initial capex) the financing probability rises, as well backed with very robust economic project data. so, when financing will happen, i believe there will be a huge re-evaluation of this dramatically fallen stock.
i believe the time of NML will come in 2015.
everything above is only my non-binding opinion. no buy, hold or sell recommendation. do your own due dilligence.