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NFE.V Vs RXM.C(Two Ontario Hot Briquetted Iron ore Companies Beside Each Other)
NFE is located North West of Dryden Ontario, RXM is North East of Dryden Ontario. Comparison has been taken from both recent financial reports, presentations and other company information. Recent private placements have also been included below. NFE raised 19 million shares at 5 cents in December for $952,000 while RXM raised $125,000 at 2 cents in December.
NFE.V RXM.C
Current Price $0.03 $0.065
Common Shares 95.8 million 103.7 million
Cash $1.28 Million $150,000
Total Assets $11.5 Million $18.3 Million
Liabilities/Debt $54,000 $362,000
NFE March 2015 Presentation:
RXM 2015 Presentation:
RXM has a more detailed cost per tonne breakdown compared to NFE, but because these deposits are so similar in proximity an grade, I would say NFE will also be able to produce a tonne of Iron at under $40. This is an amazing cost considering the industry is suffering at a current 6 year low of $54USD per tonne. Converted to Canadian dollars, this is almost $65CDN which makes is much more economical for both companies.
Now although RXM has most exploration assets compared to NFE, they have just over 1/10th the cash position and had to raise it at 2c compared to 5 cents with NFE. Without cash it’s very hard to keep the company afloat, let alone move it forward.
Then the big kicker is here are the partners involved. RXM’s last news release talks about the company trying to find a partner for its project. Well NFE has them beat by a long shot because Northern Iron not only has a financing partner, they also have three buyers lined up to purchase the Hot Briquetted Iron they produce. OMC Investments(Hong Kong) have already invested $1 million dollars and will put up to $30 million to get everything operational for 2016. There are 3 buyers in place for the HBI and it’s a total of 1.46 million tonnes. At a current price of around $250USD per tonne, that’s quite the accomplishment.
On page 4 of their Griffith Assessment :
NIC=Northern Iron Corp. NFE is the ticker symbol.
NIC has negotiated an off-take agreement with the China Railway Materials Import and Export Company (900,000 metric tonnes of HBI annually to be delivered commencing in 2016). This order represents about two thirds of the annual production of HBI from the Griffith Mine. NIC has also negotiated an off-take agreement with Tianjin Materials & Equipment Group Corporation of China for 60,000 metric tonnes of HBI to be delivered annually starting in 2016. The rest of the production will be offered for sale to the world market.
China Railway Material - 900,000 Tonnes
Tianjin Materials - 60,000 Tonnes
Danieli - 500,000 Tonnes
The Danieli deal was not announced until mid-2014.
So after comparing the two companies, it’s easy to see that NFE has farther along and likely to go into production well before RXM. So why is it trading so low? The answer to that is exposure. It’s mixed in with lots of 2-3 cent mining/exploration stocks that are ready to go bust due to lack of funds. A current fair price for NFE would be around the 8 to 10 cent range. Any additional funding from OMC is not going to dilute the stock, rather it has been setup in a sidecar company which will take interests in the assets and not dilute Northern Iron’s common stock.
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