EGR vs Similar Companies, page-12

'RNU production costs circa 30 percent higher per tonne for SPG - US$2,000/t (RNU) and US$1,531 (EGR) *(please fact check this).'

Hi SugeKnight,

As requested, I’ve done a fact check comparing EGR's and RNU's ‘PSG’ production costs. Also known as their ‘OPEX’. They are as follows:

RNU is US$1989/t GROSS. It includes its own graphite concentrate feedstock. And doesn’t include any by-product credits. See RNU ASX Announcement 1 July, 2020.

EGR is US$1998/t however it is MISSING the costs of graphite concentrate feedstock? See EGR ASX Announcement 17 April 2019—and figure 1 below which I have highlighted in red the issue. Also, it’s not clear if the Announcement includes by-product credits. See also that report.

Please note: the US$1531/t figure is actually EGRs EBITDA (an estimate of profit margin). It is not its OPEX. They are two different financial measurements. Therefore, until EGR releases an update reflecting a GROSS OPEX we can’t compare, except to say that EGR is going to be about $406/t higher (US$2404/t) based on RNU’s feedstock cost advantage. See figure 2 below.

I trust this helps.




Figure 1: Compared to RNU, EGR’s OPEX doesn’t include the costs of the graphite concentrate feedstock. See, ASX Announcement 17 April 2019, page 3.




Figure 2: RNU’s graphite concentrate feedstock cost advantage is at least $406/t and predicted to grow as prices do.