I created a new model that is simpler, and more flexible. The effect of different tonnages sold is date driven, and the focus is on tonnage capacity expressed in tonnes per annum (tpa) assumed to apply at nominated dates, which need not be at nameplate capacity. The model does not consider plant numbers, or their nameplate capacity, or their used capacity.
Because I use an EBIT multiple to derive share value, I need an the EBIT. Breakaway mooted $19.1m EBIT for 380,000tpa in FY25. However, that EBIT must be based on a CIF of $92.2/.380 to suggests revenue uses $242.63 a tonne, whereas the report mentions $310 per tonne as a recent CIF price. A crude assumption that all metrics increase in the ratio of 310/242.63 suggests that the $19.1m EBIT be increased to ($19.1)*(310/($92.2/.380)) to be $64.22 a tonne. This is a topic that may elicit debate.
The EPS is diluted by all the options and issues, which tallies to 567,824,315.
In the example below I inserted 600,000 tonnes twice, each with a different capacity-used date. The model's Present Value calculation explains the lower estimated Share Value for the later date. The dates can be any date, so reaching a tonnage-sold rate expressed in years (tpa) is unconstrained. It takes about nine months to build a plant, and one must assume how long it then takes to be producing at the pace of tonnage nominated, which need not be in 200,000 mta steps. The model does not consider the number of plants actually used to produce the tonnage chosen. The 600,000 tpa in the sample model as at 31/12/2027 could be spread over more than three 200,000 tpa plants, so conceptually at 31/12/2027, or any specified date, there could four plants, with the total nameplate capacity exceeding the tonnage specified.
Row 15 shows the logic used for "Row 9, which must be cut and pasted for rows for different tonnages. Logic for Excel should be similar.
We can assume that WAK is aiming to produce a million tonnes a year, because Management has opined that. We know the rail link will be reconnected circa mid-2026, because the Minister has stated a vague "in 2025". We know that Management is keen on entering the paper-grade kaolin field, which requires an add-on step plannedto be done at the Wedin rail siding. We know that grade of kaolin,K99P, attracts a premium price. My model would need to be changed to handle these things, so I suggest selecting a tonnage sold between 400,000 tpa and 600,000 tpa. One could go beyond 600,000 tpa later,but as the model stands, one would have to use standard kaolin (K99S) as a proxy for whatever tonnage and grade is sold in future.
