After Tesla week is time to re-assess my projections, share portfolio, etc.. So in the same format as before, here we go..
The following are my assumptions, for my use, for my strategizing, for me, me, me ME ME etc, however am happy to share . Is IMHO, not financial advice and DYOR!!!
Short term Spod price Attached short term prediction, to get a starting point of where price maybe by first SC sales. Have tried to correlate with other pricers, however, not much success so tend to stay with the SMM values we see often (they are free) most other want subscription.
Use these as a base for revenue forecasting. For example, for $US5,500 / t: - subtract $100/t for conversion from CIF to FOB, - subtract 8% for conversion from 6%SC to 5.5% (our output from DMS), - subtract 2%ish for lag in contract pricing formula assumption, ie " 90% of the average monthly price for the 3 monthly trailing set of say three indicies (Fastmarket, SMM and Benchmark) and rebased every ... bla,bla...". Just my guess. - and a guess at actual discount for long term O/T, assume 85% for Yahua and 90% for Gangfeng. So may end up applying a 75%-80% discount to the $5500/t number. Originally $5500/t (from SMM) ends up being $4150/t actual contract price. Will only know if correct when quarterly reports of sales comes through, say next year.
Long term Spod price Attached pic of long term price, shows mine and Wood Mackenzie forecast. My thinking is nearly at peak (conservative) and staying higher for longer, say to 2024/25. Use these numbers for the 12 year life. Just a guess, do not know what having for breakfast tomorrow, let alone Spod price in 10 years time!.
My Cash Flow Model Lots of assumptions in here: - Still $55M of capital layout to pay off for DMS Stage 1, etc. - Still can not clarify who pays for Stage 2 Grants open cut stripping, so in goes $20M. - assume accumulated losses of $79M plus $7M for last financial year (in 2021/22 Annual Report) total $86M is offset against 2022/23 profits. - no Tesla, so off to auction with 1.05 factor, can accept a say 15% premium but still to FOB, to 5.5% conversion, etc.., and until another O/T of to auction till.. ?? The factor falls to 1.0 in time as premium falls, a conservative assumption. - for 2022/23 I assume only 70kt off to market, conservative but feel the 79kt number from Core is ???. The final 10kt may be on the boat, but maybe the cheque is still in the mail. So falls into 23/24FY, no big drama. - all other outputs are per Core's predictions, DFS and other announcements. - etc, etc..
Attached pic of cash flow. Again this is for Stage 1 only, 12 LOM, nothing else. So flog mines to death after 12 years pack up and close down company (but we know this is not true).
For FY 2022/23 a $330M+ profit, and for FY2024/25 a $700M+ profit
From Cash Flow Model - EPS For 1.8B shares (CR and all options, bonuses taken, etc) and expected profits can calculate earning per share:
For 2022/23: 19 cents/share (but know for only really 6 months of revenue, and first 6 months spending??). Can I say an equivalent EPS is really 38 cents per share?. (Technically NO, but in my world YES.)
For 2024/25: 49 cents/share. (the above equivalent 38c/share assumption is close)
From Cash Flow Model - P/E Ratio Can apply a P/E ratio assumption to determine a share price prediction. Your call. For example, if say P/E ratio of 8, then for FY2022/23, then price is $0.38 x 8 = $ 3.04, and for FY2024/25, then price is $0.49 x 8 = $3.92, or if game could say by 2024/25 the P/E ratio may be 12, then share price is $0.49 x 12 = $5.88. Is "Mr Markets" call not mine.
Warning!! I know these numbers are wrong. Yep wrong. By 2023/24, I believe Core will be in an expansion mode and instead of counting money will be spending money, hand over fist. New this, new that, a DMS plant expansion, etc.. so it will be near on impossible to achieve these figures. Not bad, just reality. So be careful in reading anything into these cash flow numbers as will change with any new expenditures not aware of. Will post again with possible expansion numbers.
. Is IMHO, not financial advice and DYOR!!!
(20min delay)