Tsodilo Resources
May 3rd, 2019 and the market value continues to drop. It sits now at CAD$7.5 million or US$5.6 million. The company has not much treasury right now, has a 20k tonne bulk sample as a future wish list item and is sitting on probably the best untouched kimberlite pipe in botswana today.
There have been a lot of valuation type news releases in the last year that indicate a potential positive cash flow operation.
Rock value:
There are a few ranges for carat count and also value count. Probably best to lump into a big range.
Rock value will be somewhere between US$10 and US$80 per tonne. Now if they find a 1000+ carat stone at anytime, that rock value will probably need to be adjusted higher.
Operating cost:
In the early days of Lucara's operation, they were hitting US$20 per tonne with low strip ratio. That has slowly meandered up to US$40 per tonne as the pit deepens and the strip ratio goes up. For Tsodilo's pipe, probably a range of US$25 to US$30 per tonne is reasonable.
Net Profit:
With the combination of rock value versus operating cost...the net profit per tonne ranges from negative US$20 per tonne up to positive US$55 per tonne
Tonnage:
Current tonnage sits at around 20 million tonnes down to about 450 metres.
Cashflow range:
20 million x -US20 to 20 million x US$55 = Negative US$400 million to positive US$1.1 billion.
Current value:
US$5.6 milllion. Risk Reward here is extremely positive for the retail investor. The upside potential is real.
Future?:
January 23rd, 2019:
"Due to the costs associated with bulk sampling, the Company has entered into confidentiality agreements with several firms and entities which have indicated an interest in entering into a transaction via a purchase of an interest in BK16; a joint venture; or a marketing agreement for BK16 diamonds. Discussions are still at a preliminary stage and there is no certainty a transaction will be concluded."
