Q & A LOOKING AT THE FINANCIAL CLIMATE OF THE MINING INDUSTRY
prospective exploration ground ). Similarly , Euromax is in the final throes of financing and permitting its mine in Macedonia . Ilovica ’ s resource comprises 2.9Moz gold plus 1.2bn lbs Cu ( 5.0Moz gold equivalent ) and a recently completed DFS envisages a conventional 10Mtpa drill & blast , truck & shovel operation , followed by a consecutive flotation and cyanide leach process flow route . Since then , Euromax has announced a number of developments to further de-risk the project , including 1 ) convertible financing by the EBRD ; 2 ) submission of its Environmental Impact Assessment ( EIA ) to the Macedonian Environment Ministry ; 3 ) German government confirmation of UFK eligibility for the debt financiers of Ilovica ; and 4 ) moving its listing to the main board of the TSX . Considered just as a resource , Edison estimates a value of Ilovica of US $ 52.0-78.8m ( vs EOX ’ s market cap of c US $ 38m ). On the basis of the DFS however , Edison ’ s valuation of EOX is C $ 1.05 ( fully diluted ). Note that the majority of Ilovica ’ s costs are denominated in euros , making it a beneficiary of euro weakness .
In Panda Hill meanwhile , Cradle has a 50 % interest in a unique asset in Tanzania that is poised to become only the world ’ s fourth producer of niobium – a metal so unique that its price did not fall during the 2008 / 09 global financial crisis . Principally used to harden steels ( but with a plethora of high technology applications as well ), niobium is deemed ‘ strategic ’ by the US and ‘ critical ’ by the EU . Moreover , it is almost the only metal in the world in which China ’ s consumption is below trend for its GDP per head . Not only Panda Hill ’ s geology , but also the majority of its metallurgy is entirely conventional . It has excellent nearby infrastructure and three potential sources of plant water . Cradle has now advanced the project to definitive feasibility ( DFS ) stage . In the meantime , its partner , Tremont , has been conducting offtake and financing talks , with a view to making a final investment decision in Q416 . Assuming a long-term ferroniobium price of US $ 35.15 / kg , Edison calculates a project value for Panda Hill of US $ 365m , or US $ 1.11 per share for a 50 % interest . This reduces to A $ 0.70 / sh assuming full dilution at a A $ 0.26 share price , but could increase to A $ 1.42 / sh in the event of debt funding of its joint venture obligations .
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