I have done back of envelope calculations on NPV for ESS using Scoping study numbers but making the following changes:
1. Spod price of Us$2500 instead of the low Us$1500 used
2. AISC cost of US$800
3. Discount rate of 8% instead of 10%
4. Upfront capital cost of $300m
I have come up with the NPV of about A$1.45bn (compared with the $135m offered under the scheme! What a rip off!) This is an attractive deal for the joint venture if it goes ahead. They can easliy fund the initial costs themselves. Even if they had to borrow 100%, the funding costs, say at 10%, would be minimal, given the project will pay off within 2 years.
Have already voted NO
