And the other less-than-obvious matter, tied in to my post above:
Project Cost Estimate
The baseline project cost estimate, determined at a preliminary level in 2019, was $28.3M
(including ~$6M contingency). The cost estimate will be updated during 2023 as key
equipment has been re-tendered. The cost estimate will be refined and updated prior to the
decision to commence construction.
Major Equipment Procurement
VRX has prepared a summary of the major long lead time equipment that will be procured and
has recently refreshed the quotations for most of these items. Some equipment has not been
retendered for some time and will require retendering closer to the execution phase. Timing
for procurement is subject to the EPA approvals process.
When evaluating tenders VRX uses a Tender Evaluation (TEV) process to summarise the
tender submissions and to essentially land on the preferred tender.
Short Term Ongoing Works
VRX intends to carry on with the following development tasks.
- Rearrange the execution cost estimate to show costs by area rather than by task, for inclusion in the data room for DD by financiers. This is a short-term priority.
- Evaluate recent retendering of key major equipment and follow up on other equipment that has not been retendered recently.
- Continuously update a summary of lead times for major equipment suppliers to carry out the detailed design of their equipment, in order to reduce their equipment lead times.
- Continue to refine the execution cost estimate in light of recent retendered equipment and other information.
- Refine the execution schedule estimate in light of recent retendered equipment and other information.
- Produce a manning histogram for the execution phase and investigate accommodation planning as necessary.
- Review the Operating & Control Philosophy.
IMHO this is softening the market up for a re-baselining of the plant costs. For a lot more than original+contingency. I'd wager we may get close to $40m. Materials prices are high - although not as bad as 2 years ago - and construction cost are certainly still high.
- Liaise with the power provider to assist with the development of the preferred power option
So we need operating cash, and capital cash.
Things are about to get interesting...
- Forums
- ASX - By Stock
- Ann: Quarterly Activities/Appendix 5B Cash Flow Report
And the other less-than-obvious matter, tied in to my post...
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