Actually it’s very easy to get a good idea of MCRs payability,...

Actually it’s very easy to get a good idea of MCRs payability, it’s inferred in the DFS.

All one has to do is multiply the nickel tonnage by the nickel price used in the DFS ( A$ 10.20/lb) to get the LME value in the concentrate and compare with the stated revenue.

For example, if you look at the Cassini numbers for the starter project:

LOM (starter project) 35.3 kt
LME value 35,300 * 2204 * 10.2 = A$ 794 mm
Stated revenue. A$ 669 mm
Inferred payability 669/794 = 84%

You can also infer the tolling cost for processing in the concentrator. If you subtract the AIC and the net cashflow from the stated revenue there remains a cost element which I assume to be tolling fees but might include something else. Happy to be corrected if I have misinterpreted this.

For Cassini again:
Stated revenue $669 mm
AIC $4.15/lb *35.3 kt *2204 = $323 mm
Stated cashflow $ 291 mm
Remaining cost 669-323-291 = $55 mm (A$0.71 /lb) - which I assume is tolling fee (and some transport? )

If you added this 71 cents to the AIC of A$4.15/lb you get $4.86 /lb, making Cassini a very low cost producer.

Doing the same with WSA’s Odysseus DFS I get a total cost of A$4.72/lb (vs the stated AIC of A4.54 /lb). This DFS was done on a A$ 10.00 /lb nickel price.

Happy to be corrected on any of the above if I have misunderstood something.

But very interestingly WSA numbers imply a payability of 77 % and as a result. Perhaps this is conservative as they did their DFS without offtake contracts whereas MCR did their DFS after signing offtake with BHP.

Regardless this is the single biggest factor that causes the DFS cashflow for Cassini to be 8240 A$/t vs 6570 for Odysseus [all pretax, but after all capex and opex]

When one compares NPV/tonne Cassini looks even more favourable mostly due to the short initial project life vs Odysseus (10 years) and much higher upfront capex and longer payback period.

Of course the rest of MCRs DFS is not as attractive, but then I expect the Northern operations to improve greatly with exploration (Long was hugely profitable under IGO) and Mittel to be deferred as Cassini grows.

So inclusion only a fool would listen to a misinformation bot’s deliberate and repetitious mis-statement that Cassini (and MCR more broadly) is crippled by a bad deal with BHP. Did anyone else think when listening to DS talk about the offtake terms in his D&D presentation sound like that cat that had swallowed the cream. BHP is desperate for MCR’s ore, and they are almost certain to take more than the 600 kt pa of ore. Very low transport costs for BHP/MCR with the smelter just up the road.

I don’t believe MCR is overpriced but one does need to assume a reasonable amount of reserves growth, but only quite modest growth compared to what has historically occurred. I did a small top up today, which gives me a tidy round number.

EL