$BKIRF : Black Iron Inc. — Independent Economic Analysis

Long-Term Price Case$97.19/dmt
Flagship ProjectShymanivske
Shares Outstanding186,300,000
Market Cap$11,178,000
Average Annual Production7,065,000 dmt
Payable Product141.3M dmt
LoM20 Years
True All-in Costs (TAIC)$56.26/dmt.
Gross Revenue$13,732,947,000
Ukrainian Federal Government Royalties($863,300,000)
Net Revenue$1,286,9647,000
Total Operating Costs ($4,446,200,000)
Operating Cash Flow (EBITDA)$8,423,447,000
Income Taxes($1,516,220,460)
Total Capital Costs($1,124,200,000)
Net Income$5,783,026,540
Net Profit Margin42%
Absolute Cost Structure (ACS)58%
MTQ Score (Higher is Better)0.7
True Value$31.04/sh.
True Value Discount (TVD)100%
Cash Flow Multiple5x
Net Annual Cash Flow$289,151,327
Future Market Cap$1,445,756,635
Future Market Cap Growth12,834%

Notes: All Values in U.S. Dollars

Black Iron Inc. enjoys an MTQ Score of 0.7, which places it within the 80th percentile of companies under investigation. In other words, Black Iron’s projected Net Profit Margin potential is high, while its projected Absolute Cost Structure is low, a combination for which Fahy Capital Management looks when placing a prospective investment under the microscope.

MTQ Scores (BARS — Higher is Better) Vs. Absolute Cost Structure (LINE — Lower is Better)
Update, 27 September 2019

Ukraine’s Defence Minister, Andriy Zagorodniuk, has agreed to the transfer of land required for the development of Shymanivske. A Memorandum of Understanding will be signed next month.

$FCUUF : Fission Uranium — Independent Economic Analysis (U/G PFS Update)

U/G PFS, 23 September 2019
Long-Term Price Case$50/lb. U308
Flagship ProjectPLS (Triple R)
Mineral Reserves81.4M lbs.
Shares Outstanding486,014,642
Market Cap$141,867,674
Average Annual Production13.1M lbs.
Payable Product78.7 lbs.
LoM7 Years
True All-in Costs (TAIC)$35.26/lb.
Gross Revenue$3,935,000,000
Provincial Revenue Royalties($287,142,555)
Net Revenue$3,647,857,445
Total Operating Costs ($567,803,677)
Operating Cash Flow$3,080,053,768
Provincial Profit Royalties($328,593,580)
Income Taxes($492,136,715)
Total Capital Costs($1,099,582,645)
Net Income$1,159,740,828
Net Profit Margin29%
Absolute Cost Structure (ACS)71%
MTQ Score (Higher is Better)0.4
True Value$2.39/sh.
True Value Discount (TVD)88%
Cash Flow Multiple10x
Net Annual Cash Flow165,677,261
Future Market Cap1,656,772,610
Future Market Cap Growth1,068%

Notes: All Values in U.S. Dollars

$DNN : ISR Field Tests, Early Results

In a word, in Test Areas 1 & 2, hydraulic responses were observed where hydraulic responses were expected and no hydraulic responses were observed where hydraulic responses were unwanted. That’ll give the naysayers of ISR at Phoenix something to chew on.

Next Step: Commercial Scale Well at Test Area 1.

We believe Phoenix will prove a game-changer, with the potential to soon demonstrate that EBITDA may be generated by select operators in a world of sustained low spot and LT contract prices.

Denison Mines has a current weighting of 3.4% in the NuChem International Catalyst Fund.

Fahy Capital Management Q3 Updates

Our investment target in Alexco Resource Corp. was reached on 27 August 2019. We exited at U.S. $2.43 for a return of 87%.

We added to our position in Equinox Gold Corp. on 20 September 2019, raising its weighting in the NuChem International Catalyst Fund to 8%.

Subsequent to the release of an updated PFS, we raised our target in Vista Gold Corp. from U.S. $5.44 to U.S. $5.50.

On 26 September, we initiated a position in Black Iron Inc.

Fahy Capital Management does not have any additional Q3 Updates to report.

$NIOBF : NioCorp — Independent Economic Analysis

Standard Model10-Year Contracted Sales Model
Long-Term Price Case$3,676/kg Sc2O3 | $0.99/kg TiO2 | $46.55/kg NbLong-Term Price Case $3,676/kg Sc2O3 | $46.55/kg Nb
ProjectElk CreekProjectElk Creek
Payable Primary Product (Nb)168,861 tonnes (168,861,000 kg)Payable Primary Product (Nb) 35,180 tonnes (35,180,000 kg)
Payable Byproduct Metal (TiO2)418,841 tonnes (418,841,000 kg)Payable Byproduct Metal (TiO2) 418,841 tonnes (418,841,000 kg)
Payable Co-Product Metal (Sc2O3)3,410 tonnes (3,410,000 kg)Payable Co-Product Metal (Sc2O3) 947 tonnes (947,000 kg)
Shares Outstanding226,666,534Shares Outstanding226,666,534
Market Cap$95,993,277Market Cap $95,993,277
Average Annual Production7,220 tonnes FeNb (7,220,000 kg)Average Annual Production10,923,113 kg NbEq
Recovery93.14% Sc2O3 | 40.31% TiO2 | Nb 82.36%Recovery93.14% Sc2O3 | Nb 82.36%
LoM36 YearsContracted Sales Model Term10 Years
Payable Product (NbEq)447,052,463 kg NbEq Payable Product (NbEq) 109,231,128 kg NbEq
True All-in Cost (TAIC) $24.15/kgTrue All-in Cost (TAIC)$33.78/kg
Gross Revenue$20,810,292,140Gross Revenue$5,084,709,008
Total Operating Cost($6,717,578,000)Operating Cost($1,865,993,888)
Operating Margin (EBITDA)$14,092,714,140Operating Margin (EBITDA)$3,218,715,120
Income Taxes($2,467,634,246)Income Taxes($563,597,018)
Total Capital Cost($1,609,397,000)Capital Cost($1,260,504,167)
Cumulative Net Income$10,015,682,894Cumulative Net Income$1,394,613,935
Net Profit Margin48%Net Profit Margin 27%
Absolute Cost Structure (ACS)52%Absolute Cost Structure (ACS) 72%
MTQ Score0.9MTQ Score0.4
True Value$44.19/sh.True Value$6.15/sh.
True Value Discount (TVD)99%True Value Discount (TVD)93%
Cash Flow Multiple10xCash Flow Multiple 7.3x
Net Annual Cash Flow$161,728,000Net Annual Cash Flow $139,488,153
Future Market Cap$1,617,280,000Future Market Cap $1,018,263,517
Future Market Cap Growth1,585%Future Market Cap Growth 961%

Notes: All Values in U.S. Dollars

NioCorp has signed a commercial sales agreement with Traxys North America. Under the agreement, Traxys is obligated to purchase 12 tonnes of Sc over the course of Elk Creek’s first 10 years of production. Additionally, 75% of the Elk Creek Project’s primary product, Ferroniobium (FeNb), is under contract over the first 10 years of production: thyssenkrupp (OTC: TYEKF), 50%; Commercial Metals Company, 25%

Fahy Capital Management is not an investor in NioCorp. We may, however, initiate a position in thyssenkrupp this quarter.

$NORZF : NorZinc — Independent Economic Analysis

Long-Term Price Case$24/oz. Ag, $1.10/lb. Zn, $1.00/lb. Pb
ProjectPrairie Creek
Mineral Reserves186,795,000 AgEq ozs.
Shares Outstanding369,700,000
Market Cap$24,030,500
Average Annual Production10,829,166 AgEq ozs.
Recovery87% Ag, 88% Pb, 83%, Zn
LoM15 Years
Payable Product162,437,490 AgEq ozs.
True All-in Cost (TAIC) $21.86/oz.
Gross Revenue$3,898,499,770
Smelter Deductions($454,000,000)
TCRC + Penalties($432,800,000)
Gross Income$3,011,699,770
Total Operating Cost($1,797,500,000)
Operating Profit$1,214,199,770
Income Taxes + Royalties($469,895,310)
Total Capital Costs ($395,900,000)
Net Income$348,404,460
Net Profit Margin9%
Absolute Cost Structure (ACS)91%
MTQ Score0.1
True Value$0.94/sh.
True Value Discount (TVD)93%
Cash Flow Multiple5x
Annual Cash Flow$23,174,415
Future Market Cap$115,872,075
Future Market Cap Growth382%

Notes: All Values in U.S. Dollars

NorZinc is at the high end of the Absolute Cost Structure curve and the low end of the Net Profit Margin curve. In other words, Prairie Creek is a Project that will require substantially higher Silver, Lead and Zinc prices in order to be viable.

In a raging silver bull market, we think shares could appreciate by as much as 382%, which assumes shares will trade at approximately 5x future net annual cash flows.

Fahy Capital Management is not an investor in NorZinc.

$VNNHF : Belo Sun Receives Positive Ruling — Construction License Remains Valid

Belo Sun Mining reports that a three judge panel decision by the Court of Appeals of the Federal Justice in Brazil has ruled unanimously that SEMAS remains the competent authority for the environmental permitting of the Volta Grande Gold Project.

The ruling confirms that the Construction and Environmental Licenses granted by SEMAS for the Volta Grande Gold Project remain valid, subject to the completion of the Indigenous Study. [LINK]

$VNNHF : Belo Sun Mining — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
Flagship ProjectVolta Grande
Mineral Reserves3,788,000 ozs.
Shares Outstanding442,631,915
Market Cap$84,100,064
Average Annual Production205,155 ozs.
LoM17.2 Years
Payable Product3,524,100 ozs.
True All-in Cost (TAIC) $900/oz.
Gross Revenue$5,990,970,000
CFEM Royalty($42,240,000)
Gross Income$5,948,730,000
Total Operating Costs($2,488,640,000)
Operating Profit$3,460,090,000
Income Tax($155,060,400)
Total Capital Costs($486,086,900)
Net Income$2,818,942,700
Net Profit Margin47%
Absolute Cost Structure (ACS)53%
MTQ Score (Higher is Better)0.9
True Value$6.37/sh.
True Value Discount (TVD)97%
Cash Flow Multiple5x
Net Annual Cash Flow$164,124,000
Future Market Cap$820,620,000
Future Market Cap Growth876%

Note: All Values in U.S. Dollars.

$CPMMF : Crystal Peak Minerals — Independent Economic Analysis

Long-Term Price Case$645/t K2SO4
Flagship ProjectSevier Playa
Mineral Reserves7,734,000 tonnes
Shares Outstanding348,594,751
Market Cap$40,785,586
Average Annual Production205,700 tonnes
Payable Product6,171,000 tonnes
LoM30 Years
True All-in Cost (TAIC)$424/t
Gross Revenue$3,980,295,000
Net Revenue$3,757,398,480
Total Operating Costs ($1,372,677,240)
Operating Cash Flow$2,384,721,240
Income Taxes($372,016,513)
Total Capital Costs($646,489,167)
Net Income$1,366,215,560
Net Profit Margin34%
Absolute Cost Structure (ACS)66%
MTQ Score (Higher is Better)0.5
True Value$3.92/sh.
True Value Discount (TVD)97%
Cash Flow Multiple10x
Net Annual Cash Flow$45,459,700
Future Market Cap$454,597,000
Future Market Cap Growth1,015%

Notes: All Values in U.S. Dollars

Crystal Peak Minerals is a top-rated stock with an MTQ Score (0.5) that is above average and a Composite Rating of 5 (Scale of 1-5).

Above $600/t K2SO4, Crystal Peak Minerals will enjoy both a Net Profit Margin > 30% and an Absolute Cost Structure below 70%.

MTQ Score (+ Composite Rating [Red Dotted Line]) — Study Group Comparison

$BNNLF : Bannerman Resources — Independent Economic Analysis

Long-Term Price Case$75/lb. U308
Flagship ProjectEtango
Mineral Reserves130.1M lbs.
Fully Diluted Shares1,136,000,844
Fully Diluted Market Cap$40,896,030
Average Annual Production7,059,438 lbs.
LoM16 Years
Payable Product112,951,000 lbs.
True All-in Cost (TAIC) $63.71/lb.
Gross Revenue$8,471,325,000
Gross Income$8,047,758,750
Total Operating Costs($4,291,071,000)
Operating Profit$3,756,687,750
Income Taxes($1,408,757,906)
Total Capital Costs($1,075,141,000)
Net Income$1,272,788,844
Net Profit Margin15%
Absolute Cost Structure (ACS)85%
MTQ Score (Higher is Better)0.2
True Value$1.12/sh.
True Value Discount (TVD)97%
Cash Flow Multiple5x
Annual Cash Flow$79,701,055
Future Market Cap$398,505,275
Future Market Cap Growth874%

Notes: All Values in U.S. Dollars

TAIC Comparison (Lower is Better)

Net Profit Margin Comparison (Higher is Better)

MTQ Score Comparison (Higher is Better)

True Value Discount Comparison (Higher is Better)

MTQ Score — Global Study Group Comparison (Higher is Better)

$GVXXF : GoviEx Uranium — Independent Economic Analysis

Long-Term Price Case$70/lb. U308 & $12.38/lb. MoO2$70/lb. U308
Flagship ProjectMadaouelaMutanga
Mineral Reserves60,540,000 lbs.30,050,000 lbs. (FCM Estimate)
Shares Outstanding423,222,000423,222,000
Market Cap$50,786,640$50,786,640
Average Annual Production2,690,000 lbs.2,400,613 lbs.
LoM21 Years11 Years
Payable Product56,725,980 lbs.26,406,740 lbs.
True All-in Cost (TAIC) $53.37/lb.$56.43/lb.
Gross Revenue$3,954,300,000$1,848,471,800
Total Operating Costs($1,686,000,000)($960,000,000)
Molybdenum Credit$339,930,406
Operating Profit$2,174,431,535$833,017,646
Income Taxes($559,139,538)($291,556,176)
Niger Working Interest (10%)($93,929,200)
Niger Carried Interest (10%)($84,536,280)
Total Capital Costs ($676,000,000) ($183,000,000)
Net Income$761,436,720$358,461,470
Net Profit Margin19%19%
Absolute Cost Structure76%81%
MTQ Score (Higher is Better)0.30.2
True Value$2.65/sh.
True Value Discount (TVD)95%
Madaouela & Mutanga
Cash Flow Multiple5x10x
Annual Cash Flow$77,311,018$77,311,018
Future Market Cap$386,555,090$773,110,180
Future Market Cap Growth661%1,422%
Target$0.91/sh. $1.83/sh.
Cash Flow Multiple5x
Annual Cash Flow$44,734,700
Future Market Cap$223,673,500
Future Market Cap Growth340%

Notes: All Values in U.S. Dollars