Playing with numbers - Haggan value short term, page-4

'Let's say Vanadium Pentoxide is $US 5/kg for arguments sake'

You only found the potential revenue here. At $5, the project would be worth $0 because the company can't make any money. The costs would surely be more than $5 per kg. You need to subtract the costs and find the present value of the future profits to see how much the project is worth. May be assume $5 profit margin? 1kg of V2O5 is around 25 dollars (12 dollars per pound). So the costs need to be at most 20 dollars per kg (including capital costs) to make $5 margin per kg.