For anyone following my HAS posts and wondering about the veracity of my spreadsheet and observations that the Feb'22 DFS Update was 'erroneous', here it is for review. I'm pretty happy with it and pleased to not find any 'fatal flaws' on review. Other than a couple of minor errors or changes (eg 72 to 71c USD in a couple of cells) the numbers drop out same as I posted last week. Formula cells highlighted in yellow, all very simple except maybe LOM Production TREO (t) and Theoretical GROSS TREO USD/kg which I added a screen shot of the cells in question to follow.
I also shuffled/added rows a more logical order one would work through a project. Light grey rows are production numbers, green revenue, light pink costs, dark grey margin, then capex, LOM free cashflow, NPV etc. Go your hardest for those inclined...
Hot pink cells are either numbers taken from HAS feasibility studies or numbers that can be compared to reported figures. Verification of the spreadsheet and assumptions etc. My NPV guesstimates are calculated from a simple annual cashflow with 2 years @ 50% capex, followed by average annual EBITDA (row 38) for the LOM years. As previously stated, 2017 and 2019 DFS and Update all fall out on the spreadsheet roughly as those released.
The real shocker is comparing the Feb'22 DFS Update against the spreadsheet using US$112/kg NdPr results (2021 MRE column) against the reported financials (2022 DFS Update column). The "Free Operating Cashflow = $4,376M" just won't work with an "Annual EBITDA = $295M" as per below screen shoots from 2022 DFS. I have goal seeked to US$155/kg NdPr GROSS price to achieve the claimed US$295M Avg Annual EBITDA as best match verification, which then produces LOM EBITDA very close to the claimed $4,376M
Free Operating Cashflow... Note, spreadsheet refers to LOM Free Cashflow after deducting Capex, so if "Free Operating Cashflow" excludes capex then the spreadsheet agrees with all the DFS'22 Update nicely.
In conclusion, the Free Operating Cashflow (not Free Cashflow as I originally assumed)
only doubled 2019 to 2022 DFS, not gone up 250%. Still, my point looks now proven beyond doubt... The financials reported in the DFS Update in 2022 cannot be produced from only a $9/kg lift in NdPr to $112/kg as per the DFS released. The same maths producing sensible agreement between spreadsheet and released figures across numerous earlier studies, only produces the huge uplift in project value form 2019 by using ~S$155/kg NdPr not $112 as claimed.
Using US$112/kg, the market would have been asked to support a project with $658M capex returning approx $350M NPV8 post-tax, which the market almost certainly would not. $350M NPV over 15 years on a $650 (plus probably another ~$150M equity for int, fees, working cap, corp costs etc) is not "World Class" imo, not even close. Is the discrepancy in my analysis verse the DFS22 release why HAS has dropped from $6 to $3 over 12 months, or is that just a coincidence (or even a non-event if my analysis is right?). Who knows, but if I'm right the ramifications for HAS and neighbours being valued off HAS 'world class' DFS'22 could be significant to say the least...
As always, happy to be corrected, my posts are for entertainment purposes only, could be mistaken, I can only do my best, DYOR etc.
(20min delay)
