Now, that IS a Scoping Study. The assumptions are already looking extremely conservative, so actual profitability is likely to be significantly higher than indicated.
Costs are all at the low end of the guesses we have been making - and come out with (roughly) nice round numbers for some of the key figures.
Mine gate cost: about $US100 per tonne Shipping cost: about $US100 per tonne Capital investment: $US91 million
These will plug very easily into everybody's models.
Two points stand out, as areas which will almost certainly boost profits:
First, we now know that vanadium goes straight though to the tailings, and that it can be readily upgraded to a saleable concentrate. Given that the V2O5 content for much of the orebody is 0.4 - 0.5%, and more, this has potential to add substantially to revenue, with little impact on costs.
Second, the Scoping Study assumes that production will not increase from the initial 220K tonnes of graphite envisaged in the first year. Now, how conservative is that? Once again, in this announcement, SYR management have made it plain that they are looking not only at the traditional flake graphite market, but at attacking the much larger potential for substitution of graphite in other carbon markets.
SYR looks set to make a lot of money, based only on this ultra-conservative base-case Scoping Study. When people start doing the numbers, taking into account the real-world opportunities open to the company, the current figures are going to look like small change.
Cheers, Prime1
SYR Price at posting:
$2.57 Sentiment: LT Buy Disclosure: Held
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