Ann: E25 HPMSM project selected for US$166M DoE Grant, page-237

Louisiana facility back of the envelope

Capital budget: US $289 M
Grant coverage: US $166 M (≈57%)

Operating cash flows: from 65 ktpa HPMSM sales—likely priced under offtake agreements (GM + Stellantis). Assume US$1,200–US$1,400 per tonne, lower than peak spot prices of $US1700 per tonne

State tax incentives: US $57 M

Apply WACC ~9% and project life ~20+ years.

Risk-Adjustment for DOE Grant - Grant cancellation risk currently low if compliance maintained. But DOE recently revoked US$3.7 billion from 24 decarbonisation projects amid stricter reviews

Assign a risk factor to grant value, e.g., 90% likelihood => effective grant = 0.9 × US$166 M = US$149 M.

NPV Scenarios

1. Unadjusted NPV (with full US$166 M grant & state incentives at WACC 9%): likely ~US$200–250 M
2. Risk-adjusted NPV: ~US$185–225 M

Equity value per share:

Shares outstanding ~667 M

Risk-adjusted NPV ≈ US$0.30–0.35/share (~A$0.45–0.52)

Upside Scenario - With additional funding (e.g. Japanese plant), stronger manganese pricing, or project expansion, post-tax NPV could reach US$300–350 M => A$0.80–0.90/share equity