I have to look through the details and compare it to what has been said I.e. the fine print. In the end I'm going to re-cut my numbers based on whats been said in the FFS. Straight off the bat an NPV of $800m implies a SP of closer to 25c-30c for CZI with gearing to build the plant. First impressions happy that there are no obvious nasties. This is a very robust project They've gone for 26 Years versus 10 Years in the FFS. Now the project meets more what OZL want as very big long life scaleable project. There are inherent problems (with a good/ positive skew) valuing in a 26 year project.
When you go to put in a flat Ni price over 26 years you have no problem using USD$7.80 flat because the's little doubt that will get met. In fact the Cu price of USD$2.91 then looks low.
The long term nature of the cash-flows make the method of discounting by say 8.5% give you little for the year post 10. Also I suspect because its so long the IRR after tax of 20 is diluted by the out years.
How do you value the optionality . Are you really telling me in a 26 year project which after 10 years has more life than that gone and had the plant depreciated wont be expanded? Look at Tropicana.
The estimates on NPV of around $800m were accurate. It pretty much means the board of OZL have to push forward.
As I said I'll re- cut and fine tune the numbers and look for nuances.
