Do you, or anyone for that matter, have an opinion on Kaolin tonnage per year sold in near-future years, and related thereto, revenue and EBIT? I have posted on these three things in past weeks, but I do not want to be trapped in my own thought cacoon.
It may be easier to think in dry-processed equivalents, because that is all that WAK has done, so to a degree, prices are reasonably guessed, and would be known by WAK. The logic of using dry-processing equivalents is that getting into wet processing would only be done if it were a more profitable alternative, so sticking with dry-processed kaolin simply adds a layer of conservatism to our thinking.
WAK has stated in the past that it may install a plant a year, and that sometime hence it hoped to produce a million tonnes of kaolin a year ("over a million" were the words). Sticking with .2 MTA plants, that is 1 MTA. If one includes a 2.5MTA plant (Breakaway suggested two of them) the five-plant capacity would ve 1.o5, which is not an issue. Three .2MTA plants and two .25MTA plants would deliver 1.1 MTA. There is no need to think of a new plant every year it could be slower, and hence take six or seven years to get to a suspected plateau of circa 1 MTA . That circa 1 MTA is when I would set the "Base Year" that I use to establish a share value, which I discount to Present Value.
Funding capacity could be a constraint, but not if the market is strong enough to allow the quantity to be exported at viable prices. It is easy to borrow money on a project basis (a new plant) if one can demonstrate how viable the proct would be. Alternatively, some mining services companies, like NWH (NRW Holdings), are keen to expand their BOO (Build, Own, Operate) business.
BOO deals can be very flexible, with a built-in option for the mine owner to terminate arrangements via a payout. As an aside, the mining services business, Primero, has a long history of plant engineering, and in respect to kaolin, Google "Primero" "Suvo", and "Primero" "Andromeda". NRW Holdings owns Primero. For those who dream about WAK getting into ultra-high-purity alumina in years to come - see Primero's involvement at https://www.investi.com.au/api/announcements/cmx/2f85cb90-8dc.pdf
