Just to show how ridiculous IMO the 2.5% royalty is see calculations below.
Using the average forward looking projection of IO at US$65/t and AUD 70c to USD
Realised price maybe around a 20% discount so US$52/t (~A$74.256)
Total annual revenue @50mtpa. 50m X A$74.256 = A$3,712,800,000
2.5% Royalty = A$92,820,000
Shares issued approx 3.6b
About A$0.02578/sh
So shareholders “may” get around 2.5cps “IF” (yes, “IF”!) most was distributed to shareholders.
The remaining revenue of $3,619,980,000 would go to BBI to cover all cost and what remains = BBI PROFITS
The royalty works out to be around A$1.856/t using the projected life of mine IO price of US$65/t assuming a realised price of US$52/t (~A$74.256/t).
Is the 2.5% royalty put forward a fair percentage given that FMS PIOP enables multi billion dollars of revenue each year? How did that get agreed to be put forward to shareholders? Simply unacceptable IMO!
Just further confirmation of why I have voted against the Transaction.
Now, I do make errors and my assumptions are not always correct so please check my comments and calculations above. Happy to get any feedback, corrections etc. Thanks.
FMS Price at posting:
4.8¢ Sentiment: Hold Disclosure: Held
