Just a quick attempt to assess Ramu financials, at current run...

Just a quick attempt to assess Ramu financials, at current run rate.

Annual Nickel production: 34,600 tonnes - lets say 32kt
Current NI price: USD$4.50 per lb - apport $10k per tonne
But they sell this as nickel-cobalt hydroxide precipitate product (MHP), so we need to factor in a discount to the metal price to allow for this (refining etc), and I do not know what is appropriate (ANY HELP WELCOME), so I am assuming 20% discount when selling Ni in MHP.
So effective Ni sale price is 80% of $10k, i.e. $8 k per tonne
Annual Ni revenue $256M
Ramu costs (using Morgans AISC estimate of $3.00 per lb of Ni, before Cobalt credits): $6.6k per tonne Ni
Annual Ramu costs: $211M
Annual Cobalt production: 3k tonnes
Current Co price USD$25 per lb - let's use USD$15 per lb as an average i.e. $33k per tonne
If effective Co sale price is 80% of $33k, i.e. $26 k per tonne
Annual Co revenue $79M
Total revenue: $335M
less costs $211M
PBIT: $124M
Capital Cost of Ramu is quoted (by HIG) as $1.01B
if interest rate is 6%, Annual interest is $60M
PBT becomes: $64M
All this seems to arise using conservative assumptions.
and there are positive upsides, eg
- production of 34.6kt would yield extra +$20M to PBT $25 per lb
- Co price of $25 per lb if sustained would be an extra $53M
- Ni price of $5.00 per lb cf $4.50 would yield extra +$23M to PBT
It looks good to me.


PS - just rechecked Morgans and they give Ramu a capital value of 2.1B - how much debt is unstated