Yep I agree. But they could state that 75% of the tenement is untouchable for XYZ reasons. That changes the economics quite a bit! I give that as a verbose example of course, but the point is there could be factors introduced by the EPA that in combination have a material impact on the margins available to VRX.
Do I think any of this will actually happen? No, but I'm trying to rationalise the counter point regarding the EPA. It's getting boring thinking about this from the positive perspective. We are also in the abyss so can only speculate so much. May as well play devils advocate. After all I'm a god forsaken barnacle willing to see this through to it's ultimate conclusion, whatever or whenever that may be.
1. The sand isn't going anywhere 2. The demand for the sand is increasing year on year 3. The supply of silica sand is diminishing year on year 4. We are the most advanced operation with regards to enviro approvals 5. We have a portfolio of sand assets 6. We now have ~$3M in working capital 7. Top holders haven't budged in 4 years.
The only thing I'm not thrilled about is that Bruce had previously stated his preference to raise the working capital for plant build using debt as a primary source of financing. That was a great idea when interest rates were 1% not so great when it's closer to 5%. Even so, there's only 600Million SOI, so if they take the equity route it's not the end of the world.
VRX Price at posting:
9.6¢ Sentiment: Hold Disclosure: Held
