A $15 Million Market Cap Company with $2 Billion Revenue Potential
The up-and-comer to watch is Erin Ventures (TSX-Venture:EV) (OTCQB:ERVFF), a junior that could easily catapult into the conversation with companies like Rio and Eti thanks to its Piskanja high-grade boron project in Serbia. Piskanja is one of the top high-grade, world-class boron projects known in the world today. Erin operates the project through its 100% owned subsidiary Balkan Gold, the holder of the Piskanja license.
In a National Instrument 43-101 report amended in February 2019 titled, “Mineral Resource Estimate Update On The Piskanja Borate Project, Serbia,” the project hosts an indicated mineral resource of 7.8 million tonnes (averaging 31% B2O3 (boron trioxide)) and an inferred resource of 3.4 million tonnes (averaging 28.6% B2O3). The estimate is calculated in accordance with the Canadian Institute of Mining Definition Standards on Mineral Resources and Reserves, better known as simply “CIM Standards.”
Erin has filed its compulsory Annual Work Report and License Extension Application for Piskanja with Serbian regulators, which covers completing the “Certification of Reserves” process within three years.
A now historic 2014 Preliminary Economic Assessment evaluating Piskanja provided additional insight on some favorable economics for a future mine, including a post-tax NPV (10%) of US$428 million with an internal rate of return (IRR) of 64%. Forecasted annual revenue was shown at $97 million and project payback based on capex of $84.6 million (all figures in USD) within 15 months from mine start-up. At 21 years mine life, the gross revenue for the project is $2.04 billion with a net operating margin of 68.7%. All-in cost per tonne of product sold (post-tax) is projected at $165.75.
Boric acid prices are expected to keep rising moderately year-over-year, according to Statista, to reach $762 per tonne. That makes for some solid margins for Erin at $166 total production cost.