@dbd25 great post and that is exactly why I am still here.
People who are commenting, we gave away 65% and that there isn't much left in the share price are so far off the mark it's not funny.
The experience, staffing and contacts Alcoa have to get the project to commercial reality is significant for us for starters.
Are the big tier 1 names likely to commit to a product with a brand new process with a little old company in Australia with no history of taking a project to commercial production? Or would they more likely commit with Alcoa on board?
Their issue really is that retail can't get rich quick here (in months) so they move on.
This is a long term, HPA venture - all HPA development that FYI and Alcoa have must be in the venture.
I am well aware that the 'other' development other than our stock HPA (we are aware of 1 with Ecograf being the anode coating however I am told there are multiple other opportunities that both FYI and Alcoa are working on) could be a slow burn before it becomes material.
Here's a thought.
Downstream opportunities aside. Let's assume our Commercial 1k tonne per annum plant is a success and we sign off on the 8ktpa plant.
If there is interest there to say, build a second 8k tpa plant somewhere (replica to make the sums easy).
Let's assume at this stage our share price is 80c. We would need to fund 35% of the CAPEX for this second plant.
Now by then, we would have revenue coming in from the 1k tpa demo plant and have further demonstrated the process works and we should have an offtake partner. So funding for a second plant could come from debt funding or from Alcoa to name two options.
However, for the sake of this example, let's say we go to market and raise the cash via equity - so further dilution. This would unlikely be the option however let's say it is.
CAPEX of 202m US = AUD276m
35% of CAPEX in AUD is 96m
96m / 80c = 120m shares issues at 80c.
This is the most simplest of examples however for another 120m SOI we have just doubled our annual cash flows.
And this is where our low SOI is a real positive.
Competitors are already nearing
so if you double the cash flow and work out the EPS on the new SOI and assume a multiple of, say, 15X someone tells me where that puts out share price?
And the above does not factor in any downstream opportunities.
Oh and one other thought. Does anyone think that FYI could go alone and roll out this growth strategy in the HPA space over and above the one plant, with other product opportunities being developed in a timely matter when demand is set to take off in 2024 / 2025 and beyond?
Not a chance.
