It's no surprise VRX is running. Bit of a rehash from old post below.
VRX expect to produce 2Mtpa from each of Arrowsmith Central, Arrowsmith North and Muchea (after ramp up).
The BFS' have been done assuming $20/t margins. However it was mentioned at the AGM they expect up to $40/t for Arrowsmith and $60/t for Muchea.
- 6Mtpa at flat $20/t margins across all 3 generates FCF of $120M p.a
- 4Mtpa at $40/t margins for Arrowsmith and 2Mtpa at $60/t margins for Muchea generates FCF of $280M p.a
The capex for each project is around $30M and have a 1 year pay back period each. VRX would be debt free and at full ramp up after the first years. That would leave 20 years of project life generating FCF of between $120-280Mp.a.
I think a PE of 10 would be conservative at full scale production.
- At the flat $20/t margins and PE of 10 = $2.40 per share - At the adjusted margins and PE of 10 = $5.60 per share
