At current vanadium prices the NPV is about USD$500mill from the PFS, which will have significantly more opex and capex for the DFS coming through so if they use a conservative vanadium price of USD$7 for the DFS their share (74%) of NPV will be pretty limited to about USD$300-400 mill. Likely they'll use an outlandish vanadium price to help funding process and still try get an NPV $1bill+, they also used a 8% discount rate in the PFS so they'll have to up that to 10-12% for future market outlook. The risk at this level is in the next 12-24 months in the ramp up to production the construction industry will absolutely obliterate the vanadium market given 80% of its use is in steel.
$40mill market cap with raise inbound isn't massive upside given the jurisdiction risk in SA. Going into a risk-off environment with difficulty for companies to raise significant capital I can't see it getting funding in the near term. Positively, the company has some good partners in SA and quality management team so I think the project is feasible for future production. Still unsure of the sub holders selling recently (Asa selling 27mill shares and Nic van Der Hoven leaving then selling 46mill shares). 10% placement facility is only a $4mill raise so hopefully for holders it can instill some buying and the share price appreciates to a point where dilution is lessened. I think capex could be in the region of USD$300mill+ so need to get funding for around USD$80-100mill for 60:40 debt to equity for their share of the project.
Good luck holders.
Sorry for ramblings just getting thoughts out there before the DFS is dropped.
