Negative: Alcoa can pull out before phase 2 and also before phase 3. So can FYI. So Alcoa are not committed yet. But on the positive side, this is a minnow plus a whale. Alcoa would only have taken this step on the basis that they expect to see it through. They will be HPA exclusive, so they can't also do an HPA deal with someone else. And Alcoa have deep capabilities, so they can make this happen and their DD would have been extensive. Alcoa used their own feedstock in their FYI trials, so HPA production does not require FYI feedstock, therefore the FYI production process can be repeated in multiple locations.
If all goes to plan, FYI will only need a small capital raising. Say $10m to $20m. After that it will have no need to issue any more shares.
Roly said in a video that revenue will be US$24k per tonne with cost of production at less than US$7k per tonne. Converting to AUD$ and multiplying by 9,000 tonnes per year (8000 primary plant plus 1000 demo plant), that equates to gross profit to FYI of A$71.4m per year. On a P/E of say 10, that should = a market cap of A$714m. FYI currently has 36,9617,589 shares on issue fully diluted with little need to issue more. So that equates to A$1.90 per share.
For the record, I see a lot of angst on this forum aimed at negative comments. I have no objection to negative unfounded comments that do not have a rational basis. I just ignore them. Although it would waste less of my time if they were not included.
FYI Price at posting:
53.0¢ Sentiment: Hold Disclosure: Held
