Ann: Noosa Conference Presentation, page-49

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Litrush

2,886 Posts.

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23/07/22

02:14

Post #: 62685876
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Originally posted by T.E.P.: ↑

I tend to agree, @PieChart.

I struggle to gain conviction in these types of positions (junior resource stocks) before a DFS release because so much can go wrong with that release and more often than not they (DFS releases) surprise to the downside (generally speaking but also particularly in recent months due to inflationary pressures, source: Edison Research). QPM may buck the trend, but I think the trend is worth paying attention to.
It is very difficult to ascertain whether inflation will have outpaced nickel price rises (which have subsequently pulled back) or vice versa, although I am leaning toward the former (cost input inflation > nickel price) with a CAPEX blowout.
There was a Zoom recording posted on HC recently with the CFO presenting at a conference in QLD (thank you to whoever shared that). In that presentation, QPM's CFO was reasonably confident but also agreed that "...it (financing) is a significant challenge and ...is keeping us up at night"; or words to that effect.
Many people highlighted the key takeaway that another OEM might be signed soon (for the last of the Ni/Co offtake), but those comments also reminded me of SRL (formerly CLQ) and the way they were talking about financing prior to being unsuccessful. All in all, I'm going to stick with my strategy of staying on the sidelines until financing is secured (rightly or wrongly) as I think risk is elevated at the moment even at the current valuation (~$220m MC).
SRL is at a ~$180m MC, NC1 is at a ~$70m MC, AUZ is at a ~$30m MC and ARL is at a ~$130m MC, so I think there is a downside to the valuation if QPM releases a poor DFS or another delay.
I'd guestimate 5c (~$80m MC, 1.56b SOI) as possibly a base entry even if there was to be a delay or minor cost blowout as long as the company eventually secures financing and proceeds. That's based on the comparables above.
However, if the project remains, like SRL, awaiting finance for 2-3+ years, there's a massive opportunity cost where it may trade around that level until the status quo breaks. There has been talk about vertical integration in the industry for many years now with minimal progress while Indonesia stole the show.
If there is a major cost blow-out all bets are off.
The chart remains in a medium-term downtrend. That concerns me as I've learnt my lesson too many times about the dangers of falling knives.
In saying the above, from the ASX nickel set, I retain the view that QPM is the standout company (excellent management + excellent flowsheet [which leads to stellar sustainability credentials]) and most likely of the set (although certainly not guaranteed) to secure full financing that allows them to proceed to an FID (A$1 billion+ CAPEX funding is likely required which is a very large, but not impossible, hurdle).

Good luck all; I hope this project goes ahead.

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Suddenly all the non holders and so called "Inflation" experts are all over QPM Thread. They are very concerned about Capex, Opex, Oil price, weather and yes offcourse the delay of DFS increases the Capex.
FMD, we have so many economics genius but they all wasting their precious time on a Hot Sauce forum.

Me think stupid, but But the inflation, before it was the Nickle price hey.. What next.. Let's blame Putin for the Capex..

When I have bad times, comes to HC, they never disappointed me with this type's of comedy post.
But But But.. The Capex.. Ffs
QPM Price at posting: 14.0¢ Sentiment: Hold Disclosure: Held
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