Several Scenario’s – How much is FCR worth if it gets it act together

I might be talking out of my ass, and crazy, but believe that given FCR is now coming out of the last chance saloon, and the resource cycle is coming to favour resource companies, FCR is now likely to be sitting on very valuable assets in the shape of Toral and Lago in Northern Spain.

It begs the question of how much are those assets worth. The answer as always, is it depends.

Some of the ‘more realistic’ and simplistic future scenario’s IMO are:

  1. FCR simply sells off the assets as JORC 2012 assessments are received for both Toral and then (way in the future IMO) Lago.
    1. FCR needs a buyer.
    2. But Zinc is in demand.
    3. Price in the ground – undeveloped could be $400  per tonne – straight to FCR
  2. Toral – FCR goes into a JV – say 50:50 and mines. If the mine extraction cost is 50% then 50% of the fluctuating Zinc price, say $3200 per tonne * tonnage gives a ballpark value of the asset to be shared.
  3. Lago – ditto …

Now some caveats…

I am pricing it on Zinc only, and ignoring all the excitement coming out of FCR which indicates it could be higher tonnage. I have also seen higher tonnage estimates on BB’s but cannot find the original source.

So what are realistic estimates? How many tonnes are there in Toral ?  Well I found one older report from a previous owner that reckons 4m tonnes. This is Toral only.

So let’s price it on 4m Tonnes. And let’s assume every last option is taken up! There is an RNS that says 8m Tonnes BTW so I think 4m is prudent!

 

Scenario 1 is worth (say $400 * 4,000,000 Tonnes) /shares (3,055,281,439 + Bird Options  185,249,929  + Beaufort Options 50,000,000) = $0.49c = £0.37p

37 pence is a significant multiple of the current 0.0008 pence share price! 662 times !

Scenario 2 is worth ($3200/2 (extraction cost) then /2 (JV) = $800 tonne – after all you would expect to be paid for getting it out of the ground which equates to £0.74 per share or 1324 times!

More tonnage =  more value – and that’s just Toral – there is also Scenario 3 – Lago to consider

Spain Map

All eyes are now on the JORC 2012 for Toral – end of the year cannot come quick enough!

And that’s why it’s a sitter….. and the best recovery play on AIM at the moment… for the brave… I am accumulating…. 🙂

DYOR. And if there are assumptions that are more realistic then let me know…

Ferrum Crescent – In Summary …Assets speak louder than words…

Having recent successes with ANGS and TLOU both of which have now bagged,  a recovery play that has really caught my attention is Ferrum Crescent. This share has been battered in the past and I could hear shareholder towels being thrown in – not a great place to be. However those that have stayed the course might be in for a surprise. Now with a change of management strategy, and on-boarding of an experienced exec director in the form of Myles Campion, and a recent placing in which Colin Board (of Galileo resources, Xtract Resources, Jupiter Platinum etc fame) managed to get 12% of the company I am of the opinion that it has turned the corner. I have worked with several companies over the years on their strategy and it makes sense to me to onboard an experienced shareholder unlikely to get emotional and sell on a whim. Not all shareholders will be happy but for the record – I am :-). The Toral asset is going to be great IMO

As usual I am accumulating large volumes on a very small number of companies  – as I always do – and Ferrum is one of them.

If there is one video to watch I would recommend this one …

Rather than reinvent the wheel I also saw this posted on III by Dickie3times (great name :-))  – and it’s a neat summary

Ferrum Crescent Limited tells Proactive they’ve now completed a program of six holes at the Toral project in Spain – all of them returning visually identified lead-zinc intersections.

Results as good as hoped “Every hole gave us visual confirmation on lead-zinc intersection and it doesn’t really get any better than that,”

“We will use that and the historical drilling results to see what’s going on at Toral.”

Plans to drill a further three holes have been shelved after new geologist Myles Campion [and now Executive Director – i.e board member] assessed that it has enough information already, with the next phase of the exploration possibly to be to assay some of the historic core.

Historical drilling
“There has been a large amount of historical drilling conducted at Toral which returned significant lead-zinc intersections, and we are now enhancing our understanding of the structure and definition of the deposit in a cost-effective manner”.

“While the assays from the latest drill campaign are submitted and returned over the next six weeks, the company has sufficient information in the meantime to progress with designing the next stages of further exploration at Toral and to examine economic comparators for a potential future lead-zinc mining operation”. “A key focus for our geological team is to assess the possibility of defining overlapping planes of lead-zinc mineralisation concentrated within the project area. I look forward to providing further updates on our progress in due course.”

Visble intercepts
House broker Beaufort Securities noted that Toral currently has a combined (indicated and inferred) resource of 8.7Mt (million tonnes) with a weighted average grade of 10.7% (lead and zinc).

Intercepts of visible mineralisation from all six drill holes within 200 metres from surface suggest the group’s hypothesis of known mineralisation at depth linked to shallow mineralised features is correct.

Ferrum Crescent Ltd

Not for widows and Orphans and plenty of Due Diligence on your part is required!

However, this one has me interested again. Why?

I suppose some new management who look like they know what they are doing always helps!

In addition, a recent TR01 of a holder who has gone from 0.5% to 4.5% makes me step back and ask even  more questions and I find that recent drilling activities are looking like they will bear fruit – this is a change from about a year ago. Selling off assets no longer of interest is also a prudent measure.

One thing thas has clicked with me is the fact that the recent drilling at Toral is looking at historic ‘overlooked‘ Lead Zinc Mineralisation and given the excitement aeound the findings I can see why Ferrum is now full steam ahead to get a JOC 2012 estimate which will include the tonnage found in previous report  ( NI-43 101 compliant) PLUS the new stuff… !

This is interesting https://www.voxmarkets.co.uk/activity/78594/ .. and

Some interesting video’s – worth watching one by one….

 









 

As a result I have taken a large position and will continue accumulating.

 

I expect some up’s and down’s for sure. Maybe it will be a buckaroo share as games always come to shares that show promise IMO. I’m holding on.