The KRO Post Boomer Club Resource Center features companies John Kaiser has designated as members of the Post Boomer Club and serves as a gateway to related content. To be eligible for the Post Boomer Club a company must have a Bottom-Fish, Fair or Good Spec Value rating and have the potential to deliver spectacular gains if successful or to deliver substantial gains through a fundamental success which makes a long term positive difference beyond benefiting shareholders ("impact investing"). It has been created as a teaching tool for individuals born after 1964 - the Post Boomers - with the goal of fostering new audiences that ensure the long term survival of the resource junior eco-system, and as a lobbying platform for reforms to the existing funding mechanisms which discriminate against the 99% who do not qualify as accredited investors. As such it may also be of interest to older generations. The initial collection of Post Boomer Club members was launched on February 6, 2020.
Key Concepts - links to be provided as John Kaiser completes the answers
The Technical Problem - how do you value a resource project?
The Gambling Problem - how do you value an uncertain resource project outcome?
What is impact investing and what qualifies as a positive impact for a resource project?
Where does the metal that underpins your lifestyle come from?
How do you research a resource junior before placing a bet?
How can Post-Boomers and non-accredited Boomers invest directly in a resource junior?
How can Post-Boomers (and bored to tears Boomers) be influencers in the junior resource sector?
The KRO Post Boomer Club Index tracks how companies designated as members of the Post Boomer Club are performing as a group and how each index member company is performing relative to the index. It was created February 6, 2020 and backdated to January 1, 2019.
Members of the Post Boomer Club - Market Activity for August 12, 2020
FPX Nickel Corp qualifies for the Post Boomer Club on both substantial price appreciation and impact investing terms. Its billion tonne Decar nickel project in central British Columbia has the potential to produce nickel over a 40 year span from an unusual deposit in a secure and environmentally conscientous jurisdiction where the nickel mineral is awaruite, a natural stainless steel alloy. A 120,000 tpd open pit mine would produce a 65% nickel concentrate that can be fed directly into stainless steel mills. This concentrate can also undergo an additional solvent extraction step to produce nickel sulphate, a key input for the lithium ion batteries used by electric vehicles. Normally nickel sulphate is produced from nickel that has already been refined, or through a series of extra steps when the nickel ore is a laterite. The absence of sulphides in this homogenous deposit means there will be no acid drainage problems from the tailings and due to a very low strip ratio there will be modest waste rock. A bonus is that the ground up magnesium content of the tailings will sequester carbon, opening the posssibility that the Decar Mine could be carbon neutral, something that is very difficult to achieve for energy intensive mining when non-fossil fuel based power is not available. Decar is a big company project with a CapEx likely approaching $2 billion, which means that for Decar to go into production the mine will need an after-tax NPV of at least $1 billion. At 176 million shares fully diluted and a 100% project ownership that would represent a $5.68 share price. FPX Nickel has initiated work on an updated PEA which incorporates changes to the mining and processing model made since acquiring ownership back from Cliffs in 2015. The updated PEA is expected in September or October and will constitute "economic discovery" in that it will answer the question as to what nickel price is needed to achieve an NPV of $1 billion or higher. The initial PEA required a nickel price above $9/lb. The market perception is that this threshold still applies, which makes FPX Nickel's current value while nickel ranges betweem $5-$7/lb a mere optionality bet on a much higher nickel price. A substantially higher valuation awaits demonstration by FPX that $6/lb is sufficient for Decar to clear key development hurdles. Advancing Decar through the PFS stage where the company would attract buyout attention from majors would cost an additional $12 million. About $25 million has been spent on Decar since work began in 2009.