Ann: TECH Project Feasibility Study, page-376

Investment decisions by institutional investors depend upon a range of factors including the location, size and nature of the business / project, whether it is an uncontracted or contracted business (and the risk profile of counterparties / offtakers), as well as the returns.

They take into account leverage and focus on levered returns (ie. equity IRR) and in particular, the NPV of free cash flows to equity (ie. equity DCF valuation). A key consideration is how does the current share price compare with the equity DCF valuation (on a per share basis, taking into account potential dilution). DCF is also not the only valuation metric applied although it is arguably of greatest relevance for projects that are not yet producing earnings and projects that are contracted with certainty over future cash flows.

What makes QPM stand out relative to other projects seeking funding is that they have already secured offtakes for all of their production with blue chip counterparties. This is particularly relevant to debt financing but also an investment highlight for equity investors.

If Stage 1 capex reduces by approximately 15% or $300 million to $1.8 bn (including contingency), Stage 1 will deliver an after tax, unleveraged IRR of >20% under the base case. Taking into account leverage of 60-65% debt / capital, we would likely be looking at an after tax, equity IRR in the 25-30% range. These are robust returns for a metals refinery project in Australia with ofttakes covering 100% of future production and backed by blue chip investors and offtakers.

All IMO And GLTAH.