WHY Resources (TSXV: WHY; FRA: W0H) is a unique company among the thousands of resource juniors on the Canadian stock exchange – in more ways than one. Which commodity company can say that 94% of its defined resource consists of valuable products?
For comparison: an average copper mine with a standard copper content of 0.5% has to dump 99.5% of the mined material unused, as there are only 5 kg of copper in one tonne of ore (1,000 kg). At WHY Resources’ Record Ridge project in British Columbia, the ratio is exactly the opposite. 1,000 kg of raw ore contains approximately 430 kg of magnesium oxide (MgO), 420 kg of silica, 90 kg of iron oxide and 2-3 kg of nickel – a total of approximately 940 kg of valuable products with magnesium and silica as the main value. With the initially planned extraction of up to 200,000 tons per year, the project would have a theoretical lifespan of over 200 years. Even then, only a fraction of the 7.5 square kilometer rock formation, which is primarily composed of the same material, would be eventually mined. WHY therefore does not have to worry about the size of its resource.
Straight forward operation resembling a quarry
The planned open pit operation is straight forward and resembles a quarry. The material will be mechanically crushed on site, with no chemical processing on site required, ensuring no tailings will be produced. The First Nations participate as a contractor for project development and mine operations and will benefit. What’s more, the project is only five kilometers from the US border. The distance to the two ports of Vancouver and Seattle is 400 km each. From there, the prospective off-taker Galaxy Magnesium, a private US based company, intends to ship the raw ore offsite where it will be refined into various end products. Based on a formal letter of intent, WHY Resources expects to receive USD 500 per delivered ton of raw ore. This would correspond to an annual turnover of USD 100 million. The planned EBIT is expected to be USD 72 million in the first year of production and increase to USD 92 million thereafter. This is in comparison to a capex of just USD 25 million, of which USD 10 million is earmarked for the road. Payback would therefore be possible in less than a year.
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Why invest in WHY Resources?
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Disclaimer: GOLDINVEST Consulting GmbH publishes comments, analyses and news on https://goldinvest.de. This content is intended solely for the information of readers and does not constitute any kind of call to action; neither explicitly nor implicitly are they to be understood as a guarantee of any price developments. Furthermore, it is in no way a substitute for individual expert investment advice and does not constitute an offer to sell the share(s) in question or a solicitation to buy or sell securities. This is expressly not a financial analysis, but an advertising/journalistic text. Readers who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between GOLDINVEST Consulting GmbH and its readers or the users of its offers, as our information relates only to the company and not to the reader’s investment decision.
The acquisition of securities involves high risks that can lead to the total loss of the capital invested. The information published by GOLDINVEST Consulting GmbH and its authors is based on careful research, but any liability for financial losses or the guarantee that the content of the articles offered here is up-to-date, correct, appropriate and complete is expressly excluded. Please also note our terms of use.
According to §34b WpHG and §48f Abs. 5 BörseG (Austria) we would like to point out that GOLDINVEST Consulting GmbH and/or partners, clients or employees of GOLDINVEST Consulting GmbH hold shares in WHY Resources and therefore a conflict of interest exists. GOLDINVEST Consulting GmbH also reserves the right to buy or sell shares in the company at any time. In addition, GOLDINVEST Consulting GmbH is remunerated by WHY Resources for reporting on the company. This is another clear conflict of interest.
For comparison: an average copper mine with a standard copper content of 0.5% has to dump 99.5% of the mined material unused, as there are only 5 kg of copper in one tonne of ore (1,000 kg). At WHY Resources’ Record Ridge project in British Columbia, the ratio is exactly the opposite. 1,000 kg of raw ore contains approximately 430 kg of magnesium oxide (MgO), 420 kg of silica, 90 kg of iron oxide and 2-3 kg of nickel – a total of approximately 940 kg of valuable products with magnesium and silica as the main value. With the initially planned extraction of up to 200,000 tons per year, the project would have a theoretical lifespan of over 200 years. Even then, only a fraction of the 7.5 square kilometer rock formation, which is primarily composed of the same material, would be eventually mined. WHY therefore does not have to worry about the size of its resource.
Straight forward operation resembling a quarry
The planned open pit operation is straight forward and resembles a quarry. The material will be mechanically crushed on site, with no chemical processing on site required, ensuring no tailings will be produced. The First Nations participate as a contractor for project development and mine operations and will benefit. What’s more, the project is only five kilometers from the US border. The distance to the two ports of Vancouver and Seattle is 400 km each. From there, the prospective off-taker Galaxy Magnesium, a private US based company, intends to ship the raw ore offsite where it will be refined into various end products. Based on a formal letter of intent, WHY Resources expects to receive USD 500 per delivered ton of raw ore. This would correspond to an annual turnover of USD 100 million. The planned EBIT is expected to be USD 72 million in the first year of production and increase to USD 92 million thereafter. This is in comparison to a capex of just USD 25 million, of which USD 10 million is earmarked for the road. Payback would therefore be possible in less than a year.
Read more, now:
Why invest in WHY Resources?
More Goldinvest-News in English? Follow our new WhatsApp channel!
Disclaimer: GOLDINVEST Consulting GmbH publishes comments, analyses and news on https://goldinvest.de. This content is intended solely for the information of readers and does not constitute any kind of call to action; neither explicitly nor implicitly are they to be understood as a guarantee of any price developments. Furthermore, it is in no way a substitute for individual expert investment advice and does not constitute an offer to sell the share(s) in question or a solicitation to buy or sell securities. This is expressly not a financial analysis, but an advertising/journalistic text. Readers who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between GOLDINVEST Consulting GmbH and its readers or the users of its offers, as our information relates only to the company and not to the reader’s investment decision.
The acquisition of securities involves high risks that can lead to the total loss of the capital invested. The information published by GOLDINVEST Consulting GmbH and its authors is based on careful research, but any liability for financial losses or the guarantee that the content of the articles offered here is up-to-date, correct, appropriate and complete is expressly excluded. Please also note our terms of use.
According to §34b WpHG and §48f Abs. 5 BörseG (Austria) we would like to point out that GOLDINVEST Consulting GmbH and/or partners, clients or employees of GOLDINVEST Consulting GmbH hold shares in WHY Resources and therefore a conflict of interest exists. GOLDINVEST Consulting GmbH also reserves the right to buy or sell shares in the company at any time. In addition, GOLDINVEST Consulting GmbH is remunerated by WHY Resources for reporting on the company. This is another clear conflict of interest.
