Just a reminder, the numbers I used should not be relied on in any way. They are meant as a guide only, to show how much of an advantage MNB would have over its typical, large scale competitors for planned green hydrogen/ammonia projects. The lowest cost electricity for any other planned green hydrogen project that I have come across was around 5c/kwh with at least 7c being more typical. I assumed 4.5c for a "competitor" project versus 1.1c for MNB (agreed tariffs as announced) for the 200MW and I assumed 1.5c for the stage 1 and 2, combined 700MW MNB project. The electricity cost is then easy to calculate (assuming continuous operation). The "other" costs, I estimated very roughly by assuming they would be high enough such that the competitor's project would be at breakeven at an ammonia price of $630. I think I have assumed too high a figure for the "other" cost, so I expect these cash profit numbers are conservative. The ammonia price is currently around $1,000 after peaking recently at around $1,600. Also, I have assumed the production and sale of ammonia to keep it more simple. The company intends to produce ammonia nitrate. I'd expect that the further processing should mean higher profits. Ammonia nitrate sells at a lower price (currently around $500/t but each tonne of ammonia can make considerably more than 1 tonne of AN. The calculations also show the considerable upside at current ammonia prices (around $1,000/t) and the recent peak price compared to the 630/t that I highlighted in yellow. The figures in purple are for the competitor. Our 200MW shows a potential (likely conservative) cash profit of A$82.7mill per year at an ammonia price of $630/t, jumping to A$185.5mill at the current ammonia price of $1,000/t. At 700MW, those cash profit numbers jump to A$255mill and A$616mill per year. Mind blowing numbers! Put a multiple of between ten and twelve on these numbers and we are looking at a market cap target in the multiple billions.
MNB Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
