Guest post:
TNR Gold: A Rising Value Proposition.
Times have been good for TNR as its value increases across not one but two fronts. Recent developments, announcements and valuation revisions have propelled the company’s potential future net smelter royalty streams into the spotlight. Alastair Ford in his recent article is talking about "stone's throw away from a recurring USD $5 million per year revenue stream" coming close to fruition, one that itself was raised from a projected USD $1 million only a handful of years ago.
Alastair Ford: "TNR Gold Set To Be Major Beneficiary Of Ganfeng’s Proposed US$600mln Investment In The Mariana Lithium Project."
"It’s a back-of-the-envelope number, but TNR Gold Corp (CVE:TNR) could now just be a stone’s throw away from a recurring US$5mln per year revenue stream from its 1.8% royalty on the Mariana lithium project in Argentina."
TNR is close to enjoying a pincer move many years in planning as the company picks up not one but two potential future cashflow generating royalties on the essential minerals electrifying the gears of change within the electric and renewable global market: lithium and copper.
This summer is going to be very hot for all our projects; public news is pouring in with exciting new developments for both of our potential future cashflow royalty positions. On the media front, we have thrown the net out wide and trawled deep to gather investor interest. I believe that the current holding pattern at 4.5 cents may later prove to be "an unbelievable opportunity" for value investors, while each market close the price is so subdued is another close Kirill and I continue to build up our insider positions.
Since China’s largest lithium company, Ganfeng Lithium, got involved some years ago in the Mariana project, the size of the lithium resource in Argentina has increased by more than 250%, the amount of lithium the project is slated to produce has doubled from an annual 10,000 tons to 20,000 tons, and the lithium price has bounced from multi-year lows.
Ganfeng announced in the latter part of June that it was willing to put up nearly US$600mln to develop Mariana and that ideally, construction should start before the end of this year.
Ganfeng’s unit Litio Minera Argentina "recently obtained an Environmental Impact Report approval for the construction of a plant for the Mariana lithium salt lake project from Salta Province".
The lithium market itself is looking very favourable, with the predominant sedentary commentary on ‘supply excess’ being brushed off; the market had become sedated by the reasoning that as lithium is abundant, (a valid statement) demand would be comfortably met by the next big expansion or project set-up.
But each lithium project is so much more complex than your average gold mine development, so the response time to an emerging supply shortage takes much longer than an off-hand estimation would suggest and an end-user supplier would like.
The big question is whether lithium is facing the prospect of severe supply shortages in the coming years; a question that Macquarie’s equity desk addressed this week. It came up with a stunning answer – the lithium market is in perpetual deficit.
As it is, Macquarie has lithium hydroxide (Asia) rising from $US11,495/T in CY21 to $US16,200/T in CY25, and carbonate rising from $US10,399/T to $US14,250/T in the same period. Lithium prices are expected to continue to rise, moving to an incentive price by CY24. Some new supply additions temporarily tighten the market in CY26, but beyond CY27 the supply deficit widens significantly.
For Copper, the Los Azules project is coming close to a practical jump start. The project is described by Rob McEwen as “one of the larger undeveloped copper projects in the world not owned by a major, with a potential annual production of more than 200,000 metric tons and a valuation in excess of $5 billion at today’s copper prices".
TNR Gold holds 0.36% NSR Royalty on McEwen’s Los Azules project, a misleadingly subtle proportion that was nonetheless causing some salivation when news came out Nova Royalty paid USD $12.75m for 0.24% NSR on the Taca Taca project.
The company, run by Canadian gold veteran Rob McEwen, is holding conversations with another mining company as part of a proposal that could see a portion of the copper project sold privately and then taken public within 12 months, McEwen said Tuesday.
We appreciate the chance for McEwen to put Los Azules on the fast lane for development, but we would urge patience and look to our own approach with Shotgun; there can only be one deal, not ten, so time must be taken to navigate boardrooms as both projects hold the high-ground.
He expects to have a decision on the strategy for the project in the next month, adding that the would-be partner has the capability to take it through to production.
Now we have still hot from the wires:
MUX Creates McEwen Copper Which Announces $80 Million Series B Private Placement to Advance the Los Azules Copper Project
"This is a significant and exciting moment for McEwen Mining because of the value it should release. Currently, the market appears to be giving us little value for our Los Azules copper deposit, despite its impressive size and robust economics at present copper prices. Unfortunately, the scale of the required project development expenditures would require McEwen Mining to issue a massive number of additional shares. This share dilution would not be acceptable.
However, we believe that by putting our copper assets, Los Azules and Elder Creek, into a separately listed company exclusively focused on copper, we can create an attractive copper investment vehicle. It will allow us to raise the money necessary to fund progress towards the rapid development of one of the world's largest copper resources. We expect that McEwen Copper will compare very favorably to other single-asset copper developers. Within 12 months of closing this Offering we plan to take the company public. In the interim, we will be investigating ways to make a share distribution to you, MUX shareowners, of a portion of McEwen Mining’s holdings of McEwen Copper in a tax-efficient way ," stated Rob McEwen, Chairman and Chief Owner."
Now both our TNR Gold Royalty Holdings are coming one more very important step closer to generating potential future cashflow streams which will be a total game-changer for our Company. We are working hard in order to prove that this recent market aberration has provided indeed another great entry point for all those who understand the magnitude of our assets. Do your own research and join the rEVolution and Gold Company - TNR Gold Corp.
TNR Gold Investor Presentation - Building The Green Energy Metals Royalty and Gold Company from Kirill Klip
Please read my legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blogs. Always consult a qualified financial adviser before any investment decisions.
Do Your Own Research.
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