Banter and General Comments, page-14020

"SDV stage 1 and Mt Cattlin will not be sufficiently profitable to fund SDV stage 2 and 3"

Perhaps, but I wouldn't be too quick to jump to that conclusion....

History shows how rapidly and far prices can rise when the demand heats up. New highs are not to be ruled out imo. Battery demand is still in its infancy.

In that scenario, in a few years, we may well be able to fund a very significant chunk of S2 and S3 from our own earnings. Entirely possible imo, despite the current environment making it difficult to see as likley!

e.g.
2022+
Mt Cat @ 200ktpa @ $400-500/t margin? (+$850-950/t revenue)
SDV @ 10ktpa PG @ $3-4k/t margin? (+$6-7k/t revenue)
Circa $100m pa

In rough numbers, an optimistic case might be:
Spend say $140-150m on SDV from now til 2022 for S1 (existing cash plus debt/small JV)
Spend $100m in 2023 for S2 (mostly 2022-2023 profit from MC + S1)
Spend $120m in 2024 for S3 (mostly 2023-2024 profit from MC + S2)
Spend $150m in 2025 for S4 (mostly 2024-2025 profit from MC + S3)
Total capital spend circa $500m for 25ktpa SDV BG production by 2026
Maintaining majority ownership.
Just in time for the 2025-2030 S-curve surge.

Sure this may seem high now, but there is a LOT of water to flow under the bridge in the next 2-3 years.
Look how rapidly prices rose in 2017. IMO it is entirely possible for this and more to occur after 2020 and 2021 are over with.
EV price parity will be knocking by then..


Alternatively, a big fish might come in around 2023 and say we want offtake and XX% ownership, here's $XXXmillion, ramp this up to 50ktpa BG asap. ...2026 we're commissioning a 50ktpa operation.? Quite possible imo!


Of course we have to wait and see how the supply/demand evolves, and how prices progress, as my magic coin fell down the back of the couch somewhere!


Just food for thought!

GL