RE:RE:RE:RE:RE:RE:RE:50M$ fair market cap ! 10 Bagger from current levels !Hi, RRS is in the market of silica as feedstock to ferrosilicon and silicon metal final products (the feedstock is priced 50$ per to tonne up to 100$ per tonne, final products start from 1000$ per tonne upwards, due to high energy consumption). Indeed most ferrosilicon and silicon metal companies (Elkem, ferroglobe, AMG, Dow Corning...) are vertically integrated and get their own feedstock from their own mines spreaded worldwide.
However in addition to their own mines they also do buy additional quantities of their feedstock from outside sources (such as from our neighbour Sitec quarry), for obvious reasons of security of supply / cost reduction / quality of feedstock. RRS has 10millions of tonnes of reserves of silica lumps 20mm-120mm at 98.66% purity out of the ground without any purification needed. That is a rare deposit highly demanded material, you dont find easily such high quality material coupled with high quantity. The idea is to make money at 50$ per tonne. RRS PEA shows a cost per tonne of circa 26$ per tonne. There is then overseas transportation costs. My understanding is that RRS could supply its silica to european producers and still make a healthy margin.
Silicon and Ferrosilicon: Global Industry Markets and Outlook, 14th edition 2014
Silicon and ferrosilicon are manufactured using broadly the same process and are physically similar, but are very divergent in terms of their applications. Silicon metal is used in the manufacture of aluminium alloys, silicones and polysilicon, whereas at least 90% of ferrosilicon is used in the production of iron and steel.
World consumption of silicon metal experienced strong growth from 2008 to 2011, to reach 2.25Mt, largely driven by the growing demand for polysilicon in photovoltaic solar panels. Much of this growth was driven by government incentives designed to encourage the wider take-up of solar power, but spending cuts, particularly in the Eurozone, undermined the support for solar power from 2011 onwards. Demand growth in Asia is now underpinning a recovery in demand for polysilicon, which is forecast to grow at 8.3%pa over the next five years. The main factor affecting demand for silicon in aluminium alloys is their use in automotive applications; growing output of vehicles in China and other industrialising countries is likely to result in improving growth rates. Consumption is affected by consumer spending, particularly in the areas of cosmetics and home improvements; the emergence of a prosperous middle class in industrialising nations could result in demand for Si metal in silicones reaching 3.9%pa to 2019. Global consumption of ferrosilicon more than doubled from 2000 to 2013 to reach 8.08Mt; one of the main factors behind this rapid growth was its use in silicon rich construction steels in China. Over the next few years growth in steel output in China is expected to moderate as well as moving away from construction steels. In the years to 2019, demand for ferrosilicon in steel is expected to be more aligned to growth in steel output. World production of silicon metal was 2.17Mt in 2013, some 90kt below estimated consumption, but the draw-down of inventories built up in 2010 and 2011 made up the shortfall. Around 58% of Si metal is produced in China and at least 50% of output is exported. In contrast, China accounted for 73% of global output of ferrosilicon (7.84MT) in 2013, but the existence of a 25% export tax and anti-dumping duties in the USA and Europe, resulted in exports accounting for less than 15% of Chinese output.
Prices for silicon metal and ferrosilicon are primarily cost driven, reflecting overcapacity in both markets.
This in-depth report from Roskill covers every aspect of the silicon and ferrosilicon market, analyzing developments and trends while also providing forecasts out to 2019 for supply, demand and prices.
Silicon metal consumption by end-use, 2000 to 2019 (Mt)
Get accurate answers on Silicon and Ferrosilicon from independent experts
How will solar use affect the overall market for silicon?
What is the outlook for for the use of silicon in aluminium alloys and silicone products?
To what extent have Chinese exports of ferrosilicon declined?
What is the outlook for ferrosilicon demand in steel?
What is the outlook for prices of both silicon and ferrosilicon?
ARIMA11 wrote: Dr. Fouad you have contributed enormously so thanks for sharing with the rest of us.
Other than permitting which I believe will occur, the piece needed is the off-take. Pearlsinmining raised the issue on CEO.ca and he is correct; right now we have two non-binding LOI. Nothing is firm yet but I've been in for nearly a year now and I feel like RRS is moving closer than ever.
One question I posted earlier before the news release was related to SIo2 prices, supply and demand. This is what I found to date but any additional source is appreciated.
https://www.metal-pages.com/metalprices/silicon/
https://www.statista.com/statistics/301564/us-silicon-price-by-type/
https://minerals.usgs.gov/minerals/pubs/historical-statistics/#silicon
https://minerals.usgs.gov/minerals/pubs/commodity/silicon/mcs-2017-simet.pdf
Because Sillica is a minor metal and not traded on an LME, I need to understand the likelhood for more off-take. In greater depth. In the US it looks like only five companies and eight plants are mining it. Any idea about Canada? Just trying to understand the macro economics better.
DoctorFouad wrote: Hi, I think you should understand that successful investments are long term investments that recquire patience and a lot of due diligence. RRS made amazing steady progress during the last 2 years and is now on the door of becoming a producer with cash flow. IMO these low stock prices wont last for long, once the last piece of the puzzle is put in place (off-take) then its over, either you are in or not, a revaluation of the stock price would become inevtiable at that point in time, and price of entry will go substantially up to reflect the lower level of investment risk. Higher risk / Higher rewards, these are the rules of the game. In this regard, I liked particularly this post last month from "Lemarcus" who is a long term investor in RRS and a great contributor to this board :
"
Yes, lot is happening behind the scenes. I was at the Public Audience and management currently following on lots of interventions made by some local stakeholders. Sean and Paul were back in Qc City and area the week after the Public Audience to meet with some local stakeholders and for some other un-disclosed matters. (We can guess SNC, Gouv representative, and local MRC representative). The community really needs this project to happen and for Rogue to establish itself as a Long Term employer and industry promoter in the area.
Current management is working very hard to get everyone accounted for in the community and is working on social acceptability of the project. It is a simple quarry, next to another one, and in an area where there are a lot of mining claims. Community needs to feel their opinions matters and need to be part of the project. Management is currently making sure, they are ( and feel) they are part of the project and that company and local stakeholders are working together. A new activity always bring some disturbance, and everyone wants to make sure we will operate the quarry for a very very long time, and that the community will have long terms benefits of our exploitation (infrastructure, employement, etc). Q2 is a very busy quarter for management with all these moving parts that have to be put together. I'm very active in my communication with management , and always ready to put some time and $$$ to watch closely what is happening. I visited the project site in 2015 with Eddy, went to the Public Audience, met with Sean and Paul and Board in Qc after audience. I Have been around for the past 2 years, and i'm still here. I did add more shares recently and i know it takes patience and good DD to make a good $ on an investment. We have reached this new stage where we don't have long to wait before seing major de-risking occur. 2 or 3 months, and we will see if all that patience, hard DD, good management, hard work from our management, good palnning, good execution... is paying off. I'm still here, so i guess its easy to figure out what my take is on this investment. There is always risk, but succes is more predictable, that's what i bet on! " RS4turboS wrote: We've heard all this before.
Let's get the market cap up to 10M and then we'll start the serious talk...
Thanks