Poseidon last traded at $0.083.
The following is an extract from the report.
Poseidon vs. Sirius
Within this note we look at some key points of difference between the two companies, highlighting the value within POS.
In our view, POS is set to rerate as the company completes financing of the Mt Windarra project and moves into construction, along with ongoing exploration success. We recommend buying POS which is trading at a ~70% discount to NPV (A$0.27/share).
Numerous qualitative attractions for POS:
- DFS - completed.
- Mining licence - secured.
- Permits - approved.
- Ownership - 100%.
- Infrastructure - established (>$100M worth).
- Metallurgy - proven over 20 years of mining.
- Ground conditions - known (WMC mined to 550m).
- Production - 12 months away, once financed.
SIR has grade, but POS has lower capex:
- Grade - 1.6% nickel vs 2.0% and copper for SIR.
- Operating costs - US$3.35/lb vs US$1.57/lb for SIR.
- Capex - $225M vs $471M for SIR.
Exploration at POS has upside appeal:
- SIR - nickel trend established over ~4km (Nova-Bollinger ~1km strike).
- POS - nickel trend established over ~24km (Mt Windarra comprises ~2km).
- WSA - nickel trend established over ~120km (with a strike of ~7km across current mines).
- POS drilling at Mt Windarra completed in July returned some of the best intersections ever including:
- 28.5m at 3.5% Ni (includes 8m at 7.1%)
- 12.5m at 2.4% Ni
- 6.1m at 2.8% Ni
- 5.9m at 2.1% Ni
- 1.9m at 5.5% Ni
- These intersections have not been included in the current resource/reserve estimates.
- Evidence that these can be repeated in next program.
- Grade and width appear to be improving with depth.
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