Agreed Loop, I think the JV partner would derisk the project, but given they have engaged Azure Capital and have openly stated it would include an off take and partner selection process it seems very likely they would not be seeking a capital raising - unless it was in the companies best interests to do so.
I am sure they will have a plans in place to source additional feed-stock. My previous analysis suggested they would achieve somewhere between 70-90% of the nameplate capacity for the refinery with their current off-take rights.
|
Column 1 |
Column 2 |
Column 3 |
| 1 |
Nameplate refinery capacity |
10,000.00 |
Capacity of refinery output per year |
| 2 |
WMT required for each T |
7 |
7 wmt required for each 1t of refinery output |
| 3 |
Total annual wmt required |
70,000.00 |
Total wmt input required by Neometals for the refinery to operate at maximum nameplate capacity |
| 4 |
|
|
|
| 5 |
Last Q wmt |
95000 |
Last reported Q in qrtly activity report |
| 6 |
Full scale wmt Q |
109,250.00 |
Assumes 15% increase on last Q reported |
| 7 |
(A) Per year (based on last reported q) |
380,000.00 |
Last Q wmt * 4 |
| 8 |
(B) Per year (based on assumed full scale) |
437,000.00 |
Assumed Full scale Q * 4 (assumes 15% increase over last reported q) |
| 9 |
(C) Per year (based on wmt produced in June only) |
503,556.00 |
Per report 41,963 t shipped in June * 12 |
| 10 |
|
|
|
| 11 |
NMT min share |
12.37% |
offtake min option of 12.37% |
| 12 |
(A) Per year wmt (based on last reported) |
47,006.00 |
|
| 13 |
(B) Per year wmt (based on assumed full scale) |
54,056.90 |
|
| 14 |
(C) Per year wmt (base on June wmt shipments) |
62,289.88 |
|
| 15 |
|
|
|
| 16 |
Planned refinery output (A) |
6,715.14 |
(NMT share / 7) |
| 17 |
Planned refinery output (B) |
7,722.41 |
(NMT share / 7) |
| 18 |
Planned refinery output (C) |
8,898.55 |
(NMT share / 7) |
| 19 |
|
|
|
| 20 |
Name plate capacity |
10,000.00 |
|
| 21 |
Percentage of name plate achieved (A) |
67% |
67% refinery output against nameplate capacity |
| 22 |
Percentage of name plate achieved (B) |
77% |
77% refinery output against nameplate capacity |
| 23 |
Percentage of name plate achieved (C) |
89% |
89% refinery output |
| 24 |
|
|
|
| 25 |
Total refinery output short (A) |
3,284.86 |
|
| 26 |
Total refinery output short (B) |
2,277.59 |
|
| 27 |
Total refinery output short (C) |
1,101.45 |
|
| 28 |
|
|
|
| 29 |
Addition wmt feed required (A) |
22,994.00 |
(short position x 7 wmt) |
| 30 |
Addition wmt feed required (B) |
15,943.10 |
(short position x 7 wmt) |
| 31 |
Addition wmt feed required (C) |
7,710.12 |
(short position x 7 wmt) |
Now, with that said they are surrounded by other producers who they could secure small off-take to fill the additional capacity. Some are out as they have full off-take agreements, however it wouldn't be hard for them to source between 10-20 thousand wmt of additional feed whilst in the longer term they try to source through strategic focus areas like HNR and Mt Edwards. I really don't think that filling the gap for Neometals for the refinery will be a problem at all.
Also a 10tpa plant is no small plant. It may be small in comparison to Tianqi/Albemarle, SQM/KDR, MIN and a few other notable players however if you look at the size of the market cap in comparison to NMT it's like comparing apples to Oranges. Many existing plants particularly through China are less than 20tpa.
Now it stands to reason, that in time and given the right conditions Neometals could look to add another 10tpa plant, or increase the capacity of the proposed plant. But this would be years away, and would likely be dependent on them sourcing stock from HNR and Mount Edwards.
Speaking of Mt Edwards, they completed a small drill program recently so it will be interesting to see what results come back, I'd expect an announcement on this in the coming weeks / months.
@Mongoose13
With regard to your comment
"I would be very interested to understand the capex numbers and payback,IRR, etc for this as it appears to not to have the scale required to be viable or relevant"
We are all interested in the business case for the plant, and this is what they are working on. I don't think scale is an issue. If at time of production, assuming LCE prices are somewhere between $10-18k USD ($10k being ultra conservative with greater demand side pressure predicted to have substantial upside in price > 2021) then that would put the annual revenue in the order of $125m to $180m USD for the plant.
Now I will not guess what the operating costs are, but I am assuming the cost to build the plant will be somewhere b/w $75-$125m, which I think is quite an achievable spend particularly if/when they secure an off-take with a battery producer. If they look for a JV partner then capital would be a non-issue.
Really it's a no brainier, honestly if NeoMetals were not heading down this path for the refinery and integrated lithium business then I would not be holding shares in the company. If they are not securing projects to increase earnings and provide shareholder value then I would look elsewhere, so at this stage for me they are executing a sound strategy and I am happy to be a shareholder.
