MSQ hoax explainedHave you ever wondered why MSQ claims 16 billion net present value while other big projects can barely come up with couple of billions? Too good to be true? Yes.
Let's compare with GMO's Mt Hope project :
NPV: $1 billion at $15/lb (IRR 24.7%).
Or $83 million NPV at $10/lb Mo (IRR 11.3%).
Mt Hope resource is 1 billion tonnes at 0.068% Mo.
With similar Molybdenum equivaled grade MSQ has croughly 1.75 Bn tonnes. Rest is low grade and does not contribute much to economic value.
Mt. Hope has better deposit geometry than Cumo. The highest grades are near surface while MSQ has them at the bottom.Is Cumo that much better deposit? The answer is NO. It's worse. MSQ is doing everything to mislead you fellow investor.
1. MSQ base case NPV is using $16/lb molybdenum oxide price. That is not the same as molybdenum price. Moly oxide contains only 66.6% of pure molybdenum. Infact MSQ is using outrageous $24/lb Molybdenum price for their base case.
2. GMO is using conservative 10% discount for their NPV. MSQ is using outrageous low (not bankable) discount rate of 5%.
Simple as that. GMO has more robust better project but MSQ has nerve to show 16 x the NPV.
Most of the banks forecast $10-13/lb long term Mo price. And most reputable companies base their studies on that price range as well. Let's look how MSQ manages at $11.25/lb Mo price, which happens to be their low price case. (11.25/lb Mo = 7.5/lb Mo oxide):
For production rates of 50000 tpd, 100000 tpd, 150000 tpd, 200000 tpd
Internal Rate of Return (%) 3% 9% 12% 15%
At 11.25/lb Mo price MSQ needs to come up with $3.4 BILLION capex and still the project produces only 15% pre-tax IRR. Not enough to be a minor metal mine. I admit, the actual Mo prices may very well be higher, but this is to compare to Mt. Hope. Cumo is not unique or very robust project. Instead it's big and mediocre.
There's plenty of proof that MSQ is the only company mixing up Molybdenum and Molybdenum oxide prices. (molybdenum oxide is just the substance changing hands, valued by it's contained molybdenum)
How Molybdenum is priced on (LME):
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=27954480&l=0&r=0&s=MSQ&t=list
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=list&m=27963039&l=0&pd=0&r=0
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=list&m=27965895&l=0&pd=0&r=0
Why it wouldn't even make sense to base price on moly oxide concentrates with various Mo content:
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=LIST&m=27955399&l=0&pd=0&r=0
All the moly companies financials prove me right. TCM among others:
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=LIST&m=27958600&l=0&pd=0&r=0
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=list&m=27968518&l=0&pd=0&r=0
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=LIST&m=27957030&l=0&pd=0&r=0
Why Ausenco can't be held liable of this scam:
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=LIST&m=27955969&l=0&pd=0&r=0
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=list&m=27960675&l=0&pd=0&r=0
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=MSQ&t=list&m=27960994&l=0&pd=0&r=0
Some links about Mo prices:
https://www.metal-pages.com/metalprices/molybdenum/
https://www.texreport.co.jp/xenglish/eng-genryou/201001/201001191035Tue-4.html