Originally posted by vintage
Just a cameo post and I will be off again. Not going to get involved in never-ending circular debates again.
My take is that the BFS is not particularly bad and not particularly good. Just average - with pretty average NPV and IRR.
It will be a real task securing the development capital given the high cost and low IRR. The NAIF funding will, I think, be necessary to get it over the line.
There really was a lot of uninformed posts yesterday - very painful to read. Things like $9B profit (lol) and this post with its assumed $300M after tax profit.
The more correct 'after tax profit' is the forecast free cash flow of $144M per annum ($2.6B over 18 years). And this, of course, depends on the various assumptions stacking up (and those assumptions can be debated until the cows come home).
On a per share basis, this free cash flow will be significantly diluted once the 40% component of the capital is raised (not to mention the Bergen conversion dilution).
Don't know if it was commented on, as I did not read all the posts (who could?) but there is no mention in either the BFS announcement or the presentation of the SKI take-up of the 19.9%. In fact, SKI was only mentioned with respect to the potential pre-payment/streaming of product supply. This is extremely telling - and suggests that the SKI $80M investment will not be forthcoming. It would have been a no-brainer to include it in the preso, if it was still a goer.
As far as immediate term financing solution is concerned, forget it. Based on the schedule provided in the announcement, finance will not be finalised until mid-2019, probably after BFS optimisation.
Clearly, based on what has been written, there are a lot of inexperienced punters here who are clueless about NPV, discount rates, IRR, EBITDA, dilution etc.
This is a useful article for placing yesterday's announcement into some sort of context, with respect to these metrics:
https://masterinvestor.co.uk/latest/how-to-value-junior-mining-stocks/
In mining being average isn't good enough especially for a $1b CAPEX. Where is the insider and insto buying? No where. Dillution will come I have a 10b+ SOI on the cards. All imho.
(20min delay)