Just for clarity i'm in category 3 where i feel that a small Sc credit will be applied (in reality) and the REO pricing will increase. Happy to agree to disagree on that.
The NPV of number 3 (REO pricing increase) option is degrees higher than 300M US which assumed linear pricing of REO across LoM.
"Any ways if one throws in a more conservative rise of the REO pricing is where one can arrive at closer to what i think will be closer to reality."
Also I do believe even if the market and/or the NPV was to be 300M USD (which isn't far from the initial SS) one could deduce how much of the current MC is attributed to the seperation facility and magnet recycling arm.
i.e. of the 135M MC perhaps 90M of that is underpinned by the Makuutu mine. In that instance we're talking 30% of MC for NPV. which also, then isn't a post SS valuation it's a post FS valuation. With a SS for a sep facility and pilot plant for magnet recycling to drop weeks later.
Anyways, i think that the NPV for the FS on Makuutu will be higher than that based on the fact that they will likely use forecasted REO pricing similar to almost all other developers in the space. This has a material impact to the revenues and the NPV.
In this instance (as shown) even writing off the Sc credit to a minimum would still yield the entire MC to NPV of 20% if an NPV ~500M can be delineated. Based on 61% ownership.
Upside then is on what value is attributed to the magnet recycling, seperation NPV and or if more than 61% of the project is secured. the 20% moves to 100% when in production in Y1.
Good discussion.
SF2TH
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