Back to the thread topic LOL.
So, I've tweaked some cash flow models and NPV analyses, and come up wth some interesting findings.
Constructed a model to replicate the PEA scenario/s, so I can adjust CapEx, OpEx, pricing etc and see what sort of impact these have on NPV for various other production and resource scenarios.
I've tested a couple of the PEA scenarios, and it delivers a very close result;
e.g. for the base case 15ktpa scenario at $15500/t, the PEA result was a pre-tax NPV of US$654M, the model shows US$638M.
It's not perfect but imo close enough for this purpose.
So, here's the summary...
Model accounts for:
- CapEx
- OpEx
- Sustaining capital
- Tax
- Royalties
- Admin costs
- Contingency
The pre-tax NPV outcome for a few scenarios are presented in the charts below.
Here are the scenarios illustrated, and their key features:
1/ 12ktpa for 14 years
- Assumes current resource size
- Ignores initial 2ktpa stage
- Assumed CapEx is US$200M plus $35M Contingency
2/ 12ktpa for 28 years
- Assumes resource size is doubled and can support this
- Ignores initial 2ktpa stage
- Assumed CapEx is US$200M plus $35M Contingency
3/ 22ktpa for 15 years
- Assumes resource size is doubled and can support this
- Ignores initial 2ktpa stage
- Assumed CapEx is US$400M plus $70M Contingency
For each scenario shown here, I increased the OpEx to $6k/t (from the low-$4k range in the PEA)
Royalties, sustaining capital etc were as per the PEA %s.
Shown below are pre-tax NPV outcomes using discount rates of 10% and 8%, for product pricing of $15.5k/t, $20k/t, $25k/t and $30k/t.
Pay attention to what happens if/as our resource is expanded and we (potentially) increase production beyond the 12ktpa! Wow.
10% discount rate:
8% discount rate:
I also ran a custom scenario with variable product pricing as follows:
12ktpa for 14 years (our
current resource)
CapEx US$200M + US$35M Contingency
OpEx US$6k/t
Pricing:
Yr 1-3; US$50k/t
Yr 4-8; US$40k/t
Yr 9-14; US$30k/t
....At a DR of 8%, this delivers a pre-tax NPV of
US$2.98B
Let that sink in.
Still double-checking the model for minor errors/issues, but so far seems ok.
Happy to run other scenarios suggested by genuine posters. Let me know.
Not advice
DYOR
DYOMaths
$$$$$$$$$$$$$$$$$$$AGY
Tick Tock
