1.75% NSR on Dumont Nickel Project as a triggerThe question arises whether there is another sustainable trigger for Conic Minerals (now Nickel 28) in addition to Ramu Direct Investment and a possibly rising nickel price. I see the 1.75% NSR on the Dumont project as particularly valuable and as a trigger.
For the history I still have the original media release from Cobalt 27:
https://www.conicmetals.com/investors/news-releases/index.php?content_id=145
In summary, the following facts about the Dumont project based on FS 2019:
- Years 1 to 6: 73 Mlbs recovered Ni
- Years 7 to 30: 111 Mlbs recovered Ni
- There is also cobalt and a little palladium / platinum.
- The NSR of 1.75% includes all metals over the entire term.
Until mid-2020 there was an option to buy back 0.375% for USD 15m. The option was not redeemed; that means: the 1.75% NSR remain.
Let's do the calculation again for the first six years with the following parameters:
- Nickel price $ 8 / lb
- Production 73 Mlbs Ni p.a
- 8% melting and transport costs
- 1.75% NSR
- Co of 1 mt and Pd / Pt not taken into account.
Result: 73m x 8 = 584m $, net 537m $, 1.75% of which: 9.4m $, 0.11 USD / share or 0.14 CAD / share.
Taking corporate tax of 26.5% (Ontario), this means around 0.1 CAD free cash. Each year. Ascending trend. With the start of production / payment (quarterly) - my forecast: this decade.
urai58