A SynopsisThe Resource Investor piece caught my eye here. I talked with Bob Merrett, 'jack of all trades' at MBMI yesterday after reading the resource reports at Sedar. Alpha at about 10MM Tons is good, Olympic at 64MM tons is better, and Samar at 300MM historic tons or ore is very nice. Contra Resource Investor, nNone are 41-101 compliant. Just general engineering evaluation and discussion.
The key here is that they have started production at Alpha. They plan to make their first delivery from the beach to the ore ship in June. First delivery will be 30-40K Tons of ore, average grade @ 1.5%. All mining work is subcontracted, i.e. excavating, hauling, sorting, grading. Similar to a gravel operation in complexity and rock type. They have a crusher and hopper/graders. Testing is done on the beach. Ore is graded and stockpiled there by grade. Beach is 3KM from Alpha, downhill for the haul. Testing is also done by the ore carrier.
They are paid 90% FOB, per second set of grade tests [at beach by ore carrier], and 10% is paid after processing and confirmation of grade and yield at the smelter. Numerous potential NI ore buyers.
They are getting 25% of the London price [currently London at $22.50 USD] for the nickel content of the ore. That works out as follows:
MBMI Resources Alpha Prospect
London Nickel Price $ 22.50 USD
Grade % 1.5% percent
Field Price @ 25% 675 per ton
Trucks 20 Ton Cap 20 Tons per load
Distance to Beach 3 KM
Haul Fleet 6 Trucks
Cycle Time 1 hr
Haul Per Day 8
Production 960 Tons per day
Production Costs $10 per ton
Tons Per Month 24000 Tons
Initial Shipment 30000 tons
Percent Pay 90%
Gross Receipt $ 18,225,000.00
Withholding 10%
MBNI % 60%
MBNI % Revenue @ $ 10,935,000.00 Per bulk carrier load
FD Shares 79,000,000
So it looks like they could do $60 to $100MM in revenue from Alpha over the next year. At 10MM tons, they could ship 24K tons/month for 41 months, without expanding the area. It also gives them plenty of time and cash to bring the other licenses on production.
The truck sizes are from Bob, the cycle and load numbers are my
swag. Toronto, in the middle of Alpha, is doing 750 wet tons per day per something I read. Don't know the water content but could assume. The above calcs assume 'dry tonnage'. Could be off by say 10% or so if wet.
Bob says recent Philipine Supreme Court decision permits them to go full bore, even with a 'small scale' designation.
Merrett says President, Mike Mason, has a history of successful companies. Used to work with Mark Rich, the trader and pardon beneficiary of Bill Clinton
They plan similar ramp ups for the other two Philipine licenses.
Bob says they have 10MM in cash on hand. No need for further capital.
Call Bob Merrett at 877-899-1991 for info. He's an old hand.
I'd like to hear how others would summarize and handicap this.