General comments/chat, page-38235

I agree that it would be an operation with very thin margins which means keeping costs under brutal control. Important to note that the numbers are based on what was probably peak in shipping costs.

For a quick and rough comparison between two basic kaolin products DSO and KCM90 we have (using numbers from DFS and my worst case estimates for DSO in my post above).

KCM90 reason for existence is saving the $170 per ton of shipping costs.


DSO,
300ktpa shipped, revenue of $81 million and margin of $12 million, capex around $20 million. If debt funded at interest rate of 12% interest payments of $2.4 million per year leaving $9.6 million net margin before tax and other charges.

KCM90,
150ktpa shipped, cost at $336/t, price at $450/t, revenue of $67.5 million and margin of $17.1 million, capex around $60 million. If debt funded at interest rate of 12% interest payments of $7.2 million per year leaving $9.9 million net margin before tax and other charges.

Looks a bit same, same for me.


If the debt interest rate is 13% or more DSO approach brings higher net margin before tax and other charges.

Recently NIC (big and profitable company) raised money by issuing unsecured notes at 11.5% for anyone thinking that debt at 12% is outrageously expensive.