Though I’m of the view that planned production of 240,000 tpa is unrealistic and pre-production capital expenditure of ~US$270m will be incredibly difficult to raise, I do think Nachu has potential if it is scaled back to 60,000-80,000 tpa. One supply agreement for a total of 25,000 tpa I believe supports my view that 240,000 tpa will be very difficult to secure supply/offtake agreements for.
There hasn’t been a single shred of financial data provided by Magnis (or its consortium) for the iM3NY gigafactory for the market to analyse and on which it can formulate any kind of valuation. To my knowledge the only study completed on iM3NY was a scoping study and even that took 18 months to complete. Just imagine how long a PFS, DFS and BFS would take. Making essentially a blind investment in a company that plans to enter the ultra-competitive battery manufacturing industry would seem more like a gamble than an educated and calculated investment.
The market is expecting a big announcement on a cornerstone investor, strategic partner and/or a JV partner for Nachu by the end of August. There are 11 trading sessions to go in the month. Grab your popcorn folks, the next two weeks will be very interesting indeed.
MNS Price at posting:
35.5¢ Sentiment: None Disclosure: Not Held
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