1. On demand and why RNU needs to start getting more of its act together to get this to production now the PEPR is done - Post #:65496507 2. The information relevant to the BAM and what past studies showed and if those past studies were done correctly then viability I would suspect is still there - Post #:65498108 Yes I expect construction costs etc to increase - referPost #:63749800about inflation/discount rates - from previous assessments, but I also expect graphite prices to increase as well, meaning IMO I doubt IRR and NPV will change from previous studies. I suspect they will slightly increase. But NPV is discounted cash flow stream, in production you move to nominal metrics based on EPS and P/E ratios so I expect if I have interpreted things correctly SP will be well north of this in production.
In the previous quarterly this statement is made, and to be frank rereading the quarterly I would like a bit more gumf in getting things done - Post #:65967337: "During the recently completed quarter, Renascor progressed negotiations on potential binding PSG and Graphite Concentrate offtake terms with its existing non-binding offtake partners18, with discussions focusing on price, delivery schedules and other material contract terms. " It would be interesting how these discussions are progressing - RNU should be on the front foot and get these things done, given the graphite shortage and not much supply outside China in a market where quality of supply matters - Post #:51384197
In a shortage situation for graphite, prospective producers can waste a lot of time trying to understand the market and trying to get the appropriate scale as a means to economies of scale. At the end of the day, whatever you put IMO simply needs to be expandable as you will get it wrong and hence why companies expand production capacity overtime when you have the resource.
At the end of the day, RNU now needs to get this to production - it is as simple as that. It needs to start getting binding agreements for its product sales, and those will underpin the BAM in any event. It needs to be more aggressive and start ensuring this gets to production this side of 2025 or 2026 the latest. It needs to act like an LTR - been get into gear and start ramping up to production by releasing a DFS and make FID, and before that get some binding agreements in place. I suspect construction and ramp up will take two years, and I suspect first sales will be concentrate sales in any event and a staged approach to the PSG sales will take place (say a year or two after concentrate sales).
I personally thought the PEPR would have provided the impetus that all the jigsaws can come together, and the first jigsaw is get some binding offtakes to be able to get to FID (i.e. and by that I mean have the key revenue item, the estimate of revenue in terms of price and quantity, in place that allows feasibility to be tested in terms of relationship to cost/capex) that ensures that this gets to mining and then deal with the rest (in terms of how you expand subsequently because with the resource RNU has and further exploration it will expand). Markets are turning, and in turning markets funding can become an issue - RNU needs to get its act together, get binding agreements, do FID and secure funding to start getting to production. Too many delays and the delays will get longer, especially if the economy turns because a turning economy makes attaining funding harder and thus reduces your bargaining position when it comes to getting your binding offtakes IMO.
Time equals money, and time to production is the key there.
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