Ann: Neometals AIM Listing Update, page-44

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theBavarian

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16/02/22

08:02

Post #: 59597482
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Originally posted by Scolley: ↑

Hi All,

When you see comments from from some posters here that nothing is happening with NMT for the next couple years and that we are currently over valued, I would refer you to a little tidbit from the presentation released today by NMT. These presentations often hold key pieces of information that, if you can read/use a calculator, will allow you to make more informed judgements of the potential value of your investment.

The 10 Ton Per Day commercial pilot plant is due to start up and start generating revenue in next two months. There is a reason they call it a "commercial" pilot.

As per the presentation, based on current figures and depending on battery chemistry the potential margin (not revenue) per ton of batteries will be between about US$5K and US$11K if they are processed all the way to battery grade metals through the hydromet circuit. On commissioning our plant will only be producing an intermediate product (black mass) that can later be processed to battery grade metals. Our hydromet circuit will be commissioned later.

I do not have a view on the value of black mass but I expect it to be a function of the final product value less the cost of refining black mass to battery grade metals. Obviously the processing cost to black mass will be lower than the estimates given in the feasibility studies but Primobius estimate the TOTAL processing cost at about US$1500 per tonne so the Hydromet cost will be a proportion of that. Even if the Battery Grade Premium is the entire $1500 that will still leave a potential margin of between (approx) US$3K and US$9K per tonne depending on battery chemistry. Lets split the difference and say an average of US$6K per tonne. That is margin not revenue!!

I understand that in these early stages Primobius will also pick up a "disposal fee" from the battery suppliers as they currently have no viable alternative. For simplicity sake I have ignored this but it only makes the numbers better.

So at 10 TPD that would be US$60K PER DAY for Primobius or about US$22M (A$30.5M) per annum and it has already been 100% financed and owned by Primobius. So this "pilot plant" is a potentially profitable commercial operation that is due to start generating revenue in the next few weeks. Coincidentally this resonates with comments from Redwood Materials (J.C Strauble) in the US that have told the market in the last week that their pilot plant (similar size to ours I believe) is already profitable - though they have not put a figure out.

This explains why the Primobius board was so keen to upgrade the pilot plant to 10 TPD well ahead of the original time line.

Of course I don't expect any of that cash to flow back to NMT, it will be retained within Primobius to help accelerate the growth of the business and demonstrate to potential partners the strength of the business model.

Just as an exercise if you ONLY valued Primobius as a stand alone business with a single 10 TPD operating recycling plant generating approx. A$30M profit per year what value would you put on it? If you use earnings multiples for a non-growth listed ASX company I guess the market average would be (conservatively) 13x - 15x EBIT? $390M - $450M?

So, nothing happening for 2 years?

Just Sayin'.

DYOR.

Cheers,

SC

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Thanks for your posts and perspectives, which are worth reading. Not that lacking in content talk of some posters, connecting other ticker symbols with NMT, getting overly emotional when the stock moves in both directions, comparing apples with oranges, missing logical structure or just 3 liners without substantiations. Though critical views with substantiations are important and appriciated. Me like sanity.

Last edited by theBavarian: 16/02/22

NMT Price at posting: $1.23 Sentiment: Hold Disclosure: Held
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Ann: Neometals AIM Listing Update, page-44

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