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Cradle Resources - Initiation Report November 2014

11 Videos - Nov 2014


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Summary - Initiation Report November 2014

  • Niobium development Project in Tanzania.
  • Niobium is a relativity unknown commodity, however it is used in the production of high strength low alloy steel and its price has been a record highs for a number of years.
  • Interviews with management outlining the company’s performance and strategy.
  • TSI Analysis – Valuation, checklist and recent acquisition comparison Analysis (Niobec Mine).

TSI Analysis - Valuation Analysis

  • Financial Analysis of Cradle to determine an intrinsic value.
  • Discuss the key reason for the difference in our valuation and the current share price.
  • Explain reasons for the assumptions used in determining our valuation, including:
    • Niobium price, exchange rate, financing options, resource size and grade.

TSI Analysis - The Sophisticated Checklist

  • TSI analyses Cradle to see if they meet the requirements we believe are essential before considering an investment.
  • The Sophisticated Checklist includes:
    • Current and future operational performance;
    • Growth options;
    • Current and future financial position;
    • Management; and
    • Upside potential in the share price.

TSI Analysis - Niobec Transaction

  • Examine the recent acquisition of the Niobec Niobium mine for US$500m.
  • Compare and contrast the similarities and differences with the Panda Hill Project.
  • Examine the parties involved in the transaction to determine potential reasons for the acquisition.

Operations - Operation – Panda Hill

  • Panda Hill is located in the East African nation of Tanzania.
  • There is significant infrastructure surrounding the Panda Hill site with existing water, power and transport infrastructure.
  • Cradle completed a positive scoping study at Panda Hill in 2014.  Key results of the study included initial capex of US$185m, operating costs of US$19/kg (Nb price was assumed at US$44/kg) and annual production of 4.8m kg of Nb over a 28 year mine life.  A Pre-Feasibilty Study is due to be completed in early 2015.
  • Panda Hill  will be mined via an open pit mining method.  The Project has numerous advantages for open pit mining as there is significant outcropping at surface and the LOM strip ratio is 0.4:1.
  • The scoping study assumed the mill feed material will be treated via a standard flotation process incorporating a concentrate leach step on the final flotation product to clean the concentrate and a pyrometallurgical converter to produce the final product, ferroniobium.

Exploration and Development - Exploration – Panda Hill

  • Panda Hill was first discovered in the 1950s.
  • The current resource is 81.2Mt at a grade of 0.52% Nb2O5 for a contained resource of 423kt Nb2O5.
  • The current drill program should see the resource grow in confidence, size and, potentially, grade.
  • The resource remains open at depth and along strike.

Technology, Product & Market - What is Niobium?

  • Niobium is used in the production of High Strength Low Alloy (HSLA) steel production.
  • The demand for niobium has been growing by approximately 8%pa over the past decade and the price has stabilised over the past number of years between US$40 – $44/kg.
  • This analysis highlights the:
    • Uses for niobium;
    • Current & future demand factors;
    • Current & future supply factors; and
    • Barriers to entry for new producers.

Management - Ask the Question - Chairman - Craig Burton

Interviews with Cradle's management to ask them about the Scoping Study results, the current work program (Pre-Feasibility Study), the niobium market and the JV agreement with Tremont.

Management - Ask the Question - Managing Director - Grant Davey

Interviews with Cradle's management to ask them about the Scoping Study results, the current work program (Pre-Feasibility Study), the niobium market and the JV agreement with Tremont.

Management - Ask the Question - Project Manager - Keith Bowes

Interviews with Cradle's management to ask them about the Scoping Study results, the current work program (Pre-Feasibility Study), the niobium market and the JV agreement with Tremont.

Management - - Geology Manager - Neil Inwood

Management - The Sophisticated Conversation - Chairman - Craig Burton

Interviews with Cradle's management to discuss their relevant work experience and their interests and passions away from the office.

Management - The Sophisticated Conversation - Managing Director - Grant Davey

Interviews with Cradle's management to discuss their relevant work experience and their interests and passions away from the office.

Management - The Sophisticated Conversation - Project Manager - Keith Bowes

Interviews with Cradle's management to discuss their relevant work experience and their interests and passions away from the office.

Management - - Geology Manager - Neil Inwood

All Videos for Cradle Resources - Initiation Report November 2014

Summary

Initiation Report November 2014

  • Niobium development Project in Tanzania.
  • Niobium is a relativity unknown commodity, however it is used in the production of high strength low alloy steel and its price has been a record highs for a number of years.
  • Interviews with management outlining the company’s performance and strategy.
  • TSI Analysis – Valuation, checklist and recent acquisition comparison Analysis (Niobec Mine).

TSI Analysis

Valuation Analysis

  • Financial Analysis of Cradle to determine an intrinsic value.
  • Discuss the key reason for the difference in our valuation and the current share price.
  • Explain reasons for the assumptions used in determining our valuation, including:
    • Niobium price, exchange rate, financing options, resource size and grade.

The Sophisticated Checklist

  • TSI analyses Cradle to see if they meet the requirements we believe are essential before considering an investment.
  • The Sophisticated Checklist includes:
    • Current and future operational performance;
    • Growth options;
    • Current and future financial position;
    • Management; and
    • Upside potential in the share price.

Niobec Transaction

  • Examine the recent acquisition of the Niobec Niobium mine for US$500m.
  • Compare and contrast the similarities and differences with the Panda Hill Project.
  • Examine the parties involved in the transaction to determine potential reasons for the acquisition.

Operations

Operation – Panda Hill

  • Panda Hill is located in the East African nation of Tanzania.
  • There is significant infrastructure surrounding the Panda Hill site with existing water, power and transport infrastructure.
  • Cradle completed a positive scoping study at Panda Hill in 2014.  Key results of the study included initial capex of US$185m, operating costs of US$19/kg (Nb price was assumed at US$44/kg) and annual production of 4.8m kg of Nb over a 28 year mine life.  A Pre-Feasibilty Study is due to be completed in early 2015.
  • Panda Hill  will be mined via an open pit mining method.  The Project has numerous advantages for open pit mining as there is significant outcropping at surface and the LOM strip ratio is 0.4:1.
  • The scoping study assumed the mill feed material will be treated via a standard flotation process incorporating a concentrate leach step on the final flotation product to clean the concentrate and a pyrometallurgical converter to produce the final product, ferroniobium.

Exploration and Development

Exploration – Panda Hill

  • Panda Hill was first discovered in the 1950s.
  • The current resource is 81.2Mt at a grade of 0.52% Nb2O5 for a contained resource of 423kt Nb2O5.
  • The current drill program should see the resource grow in confidence, size and, potentially, grade.
  • The resource remains open at depth and along strike.

Technology, Product & Market

What is Niobium?

  • Niobium is used in the production of High Strength Low Alloy (HSLA) steel production.
  • The demand for niobium has been growing by approximately 8%pa over the past decade and the price has stabilised over the past number of years between US$40 – $44/kg.
  • This analysis highlights the:
    • Uses for niobium;
    • Current & future demand factors;
    • Current & future supply factors; and
    • Barriers to entry for new producers.

Management

Ask the Question

Interviews with Cradle's management to ask them about the Scoping Study results, the current work program (Pre-Feasibility Study), the niobium market and the JV agreement with Tremont.

The Sophisticated Conversation

Interviews with Cradle's management to discuss their relevant work experience and their interests and passions away from the office.

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