Payback period:@ 0.5mpta Capex assumed to be $150m1 year 10...

Payback period:

@ 0.5mpta Capex assumed to be $150m
1 year 10 months

@ 0.5mpta Capex assumed to be $120m
1 year 6 months

@ 1mtpa Capex assumed to be $200m
1 year 3 months

NPV:

Assuming a mine life of 10 years for 0.5mtpa plant and 7 years for 1mpta.
I've also factored in approx $25m additional accumulated losses to offset against tax as the last 1/2 yearly shows $16m.

@ 0.5mtpa, $150m capex
year 1: $89.1m (fully offset against capex)
year 2: $88.14m ($3.2m taxed at 30%)
year 3: $57.33m
... same for years 4-10

Discount rate 8% NPV: $290.52m
Discount rate 5% NPV: $350.89m
IRR ~48%

@ 0.5mtpa, $120m capex
year 1: $89.1m (fully offset against capex)
year 2: $78.96m ($33.8m taxed at 30%)
year 3: $57.33m
... same for years 4-10

Discount rate 8% NPV: $312.65m
Discount rate 5% NPV: $372.56m
IRR ~62%

@ 1mtpa, $200m capex
year 1: $163.8m (fully offset against capex)
year 2: $133.02m ($102.6m taxed at 30%)
year 3: $114.66m
... same for years 4-7

Discount rate 8% NPV: $458.2m
Discount rate 5% NPV: $526.92m
IRR ~68%

So that's the value before they start building the plant. I'll turn now to P/E ratio to get a value that is more appropriate when in full production and payback is done.

@ 0.5mtpa

P/E 10 - $573.3m
P/E 12 - $687.96m
P/E 15 - $859.95m

@ 1mtpa

P/E 10 - $1,146.6m
P/E 12 - $1,375.9m
P/E 15 - $1,719.9m

Of course there's a way to go between here and those valuations. What we really care about is not market cap but SP. At this point trying to project future dilution is pretty much guess work. I've modeled a few scenarios which I'm still working on but will post them shortly. But as a brief summary my models have so far indicated pre-production SPs both pre and post production SP's MANY multiples of where it is now.