ADN - CAPEX to NPV Comparison

With the release of the Scoping Study earlier this week we got to see some key project numbers we had been waiting for: Pre-Production CAPEX of $9m for the project, and an NPV of $413M

NPV (Net Present Value) is one of the most important numbers coming out of a study. Basically, if you took the resource and all the income and all the costs for the project and processed it all at once the NPV is what you would have left. If the NPV is greater than zero you have a viable project

ADN have an NPV of $413M for the project as per the study, but require only $9M of CAPEX to get to production. To put some context to just how remarkable this is, the chart below compares the ratio of NPV to CAPEX for a range of peers. It shows how much capital investment projects typically need in order to unlock their value! All this investment is usually funded by a debt burden or dilution. ADN should be able to do it with very minimal dilution.. It almost feels like that NPV is nearly free!

With these important numbers now published in the SS, you can understand why the brokers have started reaching out to the company wanting to meet!

(This is the same group of peers Wombat used in this post: https://hotcopper.com.au/threads/ann-scoping-study-delivers-robust-economics-for-poochera.4982126/page-46?post_id=40633661&fbclid=IwAR0ti62sWfQcwpAd6q3VBievWvc6irMTjPw8CVfr19pDYoP6q-XVOyh95FY#.XZdgcSXEXDs)


*All CAPEX and NPV's for each peer comes from their published investor presentations or studies.


Of course the SS only covers the initial stages of shipping ore (and then dry processed ore) to be toll processed into premium product for sale, and is based on a fraction of the total resource. As the resource is expanded, and subsequent stages like wet processing a premium product onsite are assessed in the future, the NPV could grow much larger. By then the project should be able to fund capital requirements from cashflow.

Here is a link to a recording of the webinar for anyone who missed it:
https://www.andromet.com.au/images/uploads/reports/Andromeda_Metals_Scoping_Study_-_Investor_Conference_Call_-_10002271_-_031019.mp3

And this is the Scoping Study:
https://www.andromet.com.au/images/uploads/reports/20190930_Scoping_Study_FINAL.pdf