M&A comparables If this discovery turns out to be what we all hope for the logical outcome is that it gets bought by somebody bigger. My question is now which transaction could be comparable to get an idea of prices.
BHP bought OZ Minerals in 2023 for AUD 9.6b or 6.4b USD
They had several assets:
Cu 1.400MT @0.6% for 8.4Mt contained copper.
Ni 390MT @0.3% for 1.17Mt contained Nickel
AU 48MT @1.6g/t
Lion zone at current dimensions and with Terry claiming 6% average would already contain 1.5Mt contained copper at a much higher average grade (=much better mining economics) .
Calc: 700m wide x 600m deep x 15m thick = 6.3m cubic meters @4t per cubic meter (confirmed by Ken in the last presentation) = 25.2Mt orebody @ 6% copper =1.5Mt contained copper today !!
If the Lion zone comes to the full 1.8km we could be at 3-4Mt of contained copper.
Our Nickel resource is tiny as of now. But according to Steve we would expect to find a real big Nickel orebody somewhere below as this Nickel orebody was the cradle that formed the Lion zone.
Copper acquisitions in 2022. Transaction between 9 and 89 cents per lb of contained copper. Having better economics one could argue we should be to the upper end or even beyond. But even if I take OZ Minerals price of 24 cents per contained lb of copper this should be 700m USD today.
I would like to get more input to see if I have any big mistake in my calculations. But my bottom line is that Power Nickel will be sold at least USD 2bn (8 USD per share fully diluted today) and if more high grade shoots are found (as hinted by Steve, Terry and Ken) this could go even higher.
Discl: I build a large position for myself in the last weeks