Yes, theywill need to raise finance, but I get the impression that they will be able todo this through debt or forward sales/offtake arrangements. They seem to havelenders lining up begging to give them money.
I havebeen indulging myself with reworking numbers on a spreadsheet based on thedistillation of the BFS from *********.com.au. Namely:
Totalsales from Arrowsmith North are forecast at $2.773 billionover the period, to generate after tax and finance cashflow of $835 million.
I'm atotal amateur on balance sheets and accountant-speak, so I would appreciate thosemore knowledgeable confirming or correcting my simplistic analysis below.
As Iunderstand it, this figure ($835m) is essentially the profit available to VRXover the 25 years covered by the BFS to retain or distribute as they see fit.This figure does not allow for any increase in commodity prices for basicinflation or appreciation due to scarcity driving up the sand price.
As it isbased on conservative estimates, my take is that this is a worst case basescenario. Is this a fair starting point?
Assuming my understanding and assumptions are reasonable, I get a figure of 7cents per share available to VRX for dividends. From 1 project! Approximately 50% of current sp! Likely available for distribution starting in around 2 years!
Obviously, this is a simple division of funds over 25 years and the BFS states that the extraction will run at something like 50% of plant capacity for the first few years. So, I guess the initial dividend pool will result in a much lower figure, simplistically 50% of that overall figure of 7 cents i.e. 3.5cents per share.
|
| Arrowsmith North |
|---|
| 1 | Income |
|
|---|
| 2 | 25y sales | $2,773,000,000 |
|---|
| 3 | 25y Cash flow a/tax & finance | $835,000,000 |
|---|
| 4 | Cash flow a/tax & finance p/a | $33,400,000 |
|---|
| 5 | Share on issue |
|
|---|
| 6 | Shares | 404,000,000 |
|---|
| 7 | Options | 72,000,000 |
|---|
| 8 | Total | 476,000,000 |
|---|
| 9 | Earnings / share after tax & finance | $0.070 |
|---|
| 10 | EPS 50% discounted | $0.035 |
|---|
If the above is reasonable, and we are expecting significantly better numbers form Muchae, might we be looking forward to a dividend pool heading towards 10c/s when both plants are in production, maybe 3 years from now?
