Hey Kookaburra,The DFS does not appear to include debt financing...

Hey Kookaburra,

The DFS does not appear to include debt financing costs because the capex figures are front loaded in the first two years.

Debt financing costs aren't needed to prepare a discounted cash flow because of the front loaded capex costs and discount rate. The NPV is a summation of each year's cash flow after the discount rate is applied, meaning it includes the capex figures in the first two years as opposed to being spread out over multiple years.

It is important to note that although the debt financing costs are higher when spread over a greater time period, this is offset by the high discount rate applied to the outer years.

The IRR can be calculated by editing the discount rate to produce an NPV of $0.

With more clarity on the project's debt structure, a more accurate NPV could be calculated. However, given MNB is likely to be valued on a PE ratio when it starts production, I don't think it would produce any real value.

I hope this answers your query.