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post Posted: Apr 4 2019, 05:12 PM
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not much chat about this
From Mike Young’s perspective at least, West Musgrave is the gift from BHP that just keeps on giving. In 2014 BHP effectively surrendered the West Musgrave nickel and copper play to Cassini Resources, which is one of two current exploration companies formed on the back of Young’s entrepreneurial enthusiasm.

Not two years later Cassini lured OZ Minerals into a joint venture that has seen South Australia’s other copper champion throw capital and in-house savvy at fully defining the breadth and quality of a still-growing host of discrete deposits that make up the West Musgrave story.

With that moving along tickety-boo, it rather looks like Young has lured another supporter to the Cassini party and this time it is on the customer-side of the equation. Cassini went into a trading halt on Wednesday and we are hearing it is preparing to confirm on Thursday a material placement to a strategic shareholder that is a nickel and copper end user.

My first thought was that maybe a major like Glencore might be a player. Then I recalled a conversation with Young a long time ago where he indicated a preference for crawling over broken glass than a partnership with Switzerland’s miner.

There is, of course, a more obvious option. Last August the Street Talk crew reported that the principal of a Chinese manufacturer that makes long battery technology was one of several Asian-based investors who supported a $4.2 million share placement. Street Talk named Xu Jinfu as the new supporter. He is the chairman of Guangzhou Tinci Materials Technology Co. And the betting ahead of Thursday’s announcement was that having entered for a penny, Tinci might now be in for a pound.

Having sat on the WMC and BHP shelf for nearly 15 years, things now look to be moving pretty fast around West Musgrave.

Does that mean BHP made a mistake when it sold West Musgrave for $250,000, the promise of a $10 million payment on the first anniversary of initial production and a 2 per cent net smelter royalty? No it does not. The mining world is littered with live mines that have dropped out of the majors. That is how it all works.

BHP surrendered West Musgrave because the known knowns of the distant Western Australian discovery (it sits pretty much on the border with South Australia) suggested it was never going to climb into the class that cracks it for tier-one status for the Big Thinkers. It was a special discovery for lots of reasons but it was not going to move the dial for the world’s biggest diversified resources house. But what is too small for BHP can be company-making for someone with a keen eye and a managerial legacy that the majors trust.

As we have noted in the past, Young’s track record in iron ore proved critical to BHP’s decision to deliver its tenements to Cassini. Young was the force behind one of the original boom-time disruptors in the Pilbara, BC Iron. Over just four years he took a mid-quality, short-life iron ore deposit to highly profitable first production in 2011. BC Iron then surfed the boom until it couldn’t, returning capital to shareholders along the way. And when the boom turned sour, it progressively passed control of its Nullagine joint to cornerstone partner Fortescue Metals Group. By 2012, Young had moved on.

The other figure important in establishing Cassini’s credibility with BHP was Jon Hronsky. He was one of the WMC guys who developed the geotechnical modelling that led WMC’s explorers to the most western fringes of WA’s nickel country where they revealed the Babel and Nebo deposits that are two little nickel and copper suns around which the OZ appraisal work is circling.

The West Musgrave nickel and copper play has been a personal fascination since the discoveries were revealed at the turn of the century by the last great generation of eccentric explorers gathered together under the umbrella of Australia’s most successful hard rock minerals whisperer, WMC

The greatness of the WMC crew was that they were the first to consistently find Australian ore bodies that could not be seen from the surface. The most famous of them was the first of the invisibles: Olympic Dam. But there were a host of others, including the Ernest Henry copper find that was subsequently lost to a pegging gaffe and then a much bigger copper discovery in the Philippines called Tampakan.

Tampakan was supposed to be the find that would make WMC people feel better about losing Ernest Henry. Localised terrorism, provincial indifference, environmental activism and regional and national political uncertainties combined to ensure it didn’t...

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

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post Posted: Apr 8 2014, 11:44 AM
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In Reply To: mme's post @ Apr 3 2014, 10:21 AM

Still time to get set with this one. Have been accumulating over the last 2 days for a long term hold.

post Posted: Apr 3 2014, 10:21 AM
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In Reply To:'s post @ Jan 16 2012, 01:43 PM

Nice for those who bought prior to today!! Also great for those who bought first up! biggrin.gif
post Posted: Jan 16 2012, 01:43 PM
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