Why I think a Yes vote will mean a capital raising, page-30

Guerilla
Why do you keep quoting the Kalkaroo pre-tax NPV and include that in the total value of the assets?????? It's bloody annoying and misleading to others.

The pre tax NPV 7.5% says it all. Firstly it's pre-tax so unless HAV has plenty of tax losses it will have to pay tax, so it's misleading to quote pre-tax numbers in a market valuation. So, knock off around 1/3rd for taxes- you have to look at when the taxes are paid- tax is paid on what's called taxable income and not cashflows. It's ok to quote pre-tax (not good practice though as it doesn't provide the full picture) in a NPV statement but not company value.

Secondly, the discount rate is very very low. No investor will apply a 7.5% when buying into a pre-development asset such as Kalkaroo. Try at least double that.

Thirdly, what's the ratio of the NPV post production/start up capex and what's the capex required to get the project going? $300m-$400m? And what's the payoff for that in NPV terms??? Not large enough from my review. You find many projects are either too large to get started by small companies and too small for large companies so no matter what the NPV is, the project just won't get going as it's no interest to others. If you can find an investor great, but projects have to be in the sweet spot.

Fourthly, market value is not NPV. NPV is just a series of estimated cashflows discounted at the relevant discount rate. Investors may also apply much higher contingencies than what's in any model as they're the ones risking their money. How many investment projects come in or under budget?? Not many.

The market value of a project with a large NPV that no one wants is really Nil.