Worth really having a think and good to revisit DFS numbers at this stage. Remember this is the new integrated DFS that was released in 2023 while in actual production, not something from 2021 or similar like many of our peers. This SHOULD be relatively accurate post inflationary period and with real world on the ground numbers inputted.
I've highlighted the only number that really truly matters at this stage imo:
That's the all in sustaining cost (AISC) showing as $987 (Canadian) per tonne which today equates to US$731/t. Cash cost per tonne is great but this is the really crucial number imo.
We're currently sitting at what, about US$1005/t SC6 spot pricing right now I think? Call it US$1000. So for 5.5% spod let's say US$900/t.
If we can get our ASIC to this number of US$731/t as claimed in this year's in production DFS then we should have no issues whatsoever remaining in production and will still generate a reasonable profit per tonne and still bring in a substantial revenue and cash flow. The market seems to be pricing us in as if we are going to the CXO route of care and maintenance but I don't see this based on these and other reported numbers. Granted if spot price were to drop further or our costs have got up then that's a different story.
If we can get costs down to this number as they have claimed once at steady state production (and we have cash on hand to get us there as we know), then even at the current woeful prices that could still bring NAL in a pre tax profit of around US$30m (A$45m) if producing say 180ktpa of SC5.5 from NAL.
Let's not forget that 180ktpa at $900 per tonne is still US$162m (A$243m) in revenue per year for SYAQ either... that's a significant cash flow when our market cap is now only double that at A$500m ish !
Now, let's say for balance that NAL's ASIC is currently higher than this number, which is likely to be honest, as the last reported actual cash cost per tonne during ramp up was said to be around US$830/t).
Let's say our ASIC is as high as US$1000/t (still only 8 months since we started production let's remember), then we would be losing say US$100/t overall at the same current low sale pricing. That's an US$18m (A$27m) loss over a 12 month period if still producing 180ktpa. A loss. Therefore, although far from ideal, we could easily last a couple of years at that loss with our cash on hand without much concern at all while we continue to improve efficiencies and reduce production costs. This would mean we are able to retain experienced in demand staff, continue to develop on the ground productivities and processes and maintain transport and logistics chains. Care and maintenance like CXO would potentially mean losing all of that, which is why I for one don't see it happening. Their cost per tonne was around US$1200 and ASIC higher again, so for them they have no choice, but we do I think, even in this worst case scenario.
We need costs as low as possible to weather this and still make serious money, but even if at a small loss like shown above I think we are looking stable with our cash on hand and worst case our ATM facility, then once prices rebound in time (next month or next year, nobody right now seems to be able to say), we then will be a honed, fine tuned and highly efficient machine and will fly as the North American gigafactories and battery chain really starts up.
That's my take on it currently. Times are crazily tough right now in comparison to a year ago and of course we're all wishing we sold everything in the 20s and 30s but that is the joy of hindsight I suppose. I feel if our costs are looking ok to good, we are in this for the long run as a leader in North America. Moblan should be lower cost production again so a lot to look forward to if we can get NAL to maximum cost efficiency and ride this out.
The quarterly will hopefully give us huge insight into where we stand, we're being smashed until then it seems...
All my opinion obviously, good luck to all, god knows we need some after the last 12 months my god!
(20min delay)