In addition to the known and hopefully stable numbers for Renison going forward, I was trying to get a handle on what Rentails would mean in terms of adding FCF to MLX in about 2 year's time:
We know Rentails will produce about 60% of Renison's existing 5,000tpa output. So that's 3,000tpa (all MLX share).
We also know that cost at Rentails is only going to be about 60% of Renison's cost. I presume Brett was referring to C1 cash costs in his recent interview with Simon Catt. Renison's C1 is about A$16,000/t, so Renison should be about A$10,000/t. That's a pretty nice advantage!
What we don't know is debt/equity mix for financing. Total capital outlay (MLX share) will be A$200mn. I'm not sure what is common in the industry. If I had to guess it's going to be a 50%/50% split between debt and equity. Anyone has any insights re financing rates for this sort of project? 10% interest?
I don't recall hearing about the projected lifetime for Rentails. I presume as long as Renison itself is running it keeps adding to the tailings? Anyone has insights?
How much of the capital outlay can be depreciated annually? Will matter for taxable profit since MLX is likely to be taxable again post Q1 2025.
Think with some additional clarity on the points above one can work out IRR for Rentails. My totally unscientific estimate is that Rentails can add about A$50mn FCF annually (MLX share) once in production. Anyone else has a better qualified estimate?
MLX Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)