here is a interesting article from a german Forum:
https://www.wallstreet-online.de/diskussion/1272702-1-10/renascor-resources-zukuenftig-groesster-graphit-player
translated by DeepL:
RNU DSF, it says everything important.
https://renascor.com.au/wp-content/uploads/2023/08/20230808-...
On page 4 you will find a graph from Benchmark on graphite market development. This shows an oversupply for the years 2026 to 2029 for 4 years, which is currently 50% dependent on the BEV market, later the dependence is expected to increase to 75%. Benchmark does not see the market turning into a supply deficit until 2030.
All graphite producers are affected by market conditions, including WKT's Lindi Jumbo.
What is even more important for RNU is the timeline on page 36. For MPP, production is expected to ramp up from the beginning of 2025 at the earliest. For PSG, production is planned from Q2/2026 at the earliest.
For both parts of the production ramp up, according to the benchmark graph for graphite, the market situation will be oversupply, which will have a negative impact on the chart.
The Renascor BAM Siviour project has an NPV10 (real, after-tax) of A$1.486m with an EBITA of A$363m. The project is structured in 4 stages, Stage 1 is staggered by 5 quarters for MPP and PSG. The asterisks behind the Stage 2 lines are explained below the graphic:
* Production of graphite concentrates from the Stage 2 MPP is scheduled to commence in the third quarter of 2027 and production of PSG from the Stage 2 PSG plant is scheduled to commence in the second quarter of 2028. For the period of approximately nine months between the commencement of production from the Stage 2 MPP and the Stage 2 PSG Plant, graphite concentrates produced from the Stage 2 MPP are expected to be sold and subsequently used by the Stage 2 PSG Plant as feedstock for the production of PSG.
These figures indicate that MPP will ramp up from 2025 with 75kt Cg concentrate, with production starting slowly and first concentrate sales expected towards mid-2025. After the *, a nested production of MPP and PSG will be established, as the concentrate from Stage 2 MPP is required as a plant feed for PSG production.
From the DSF data, RNU is expected to achieve an EBITA of A$363m at final build-out with nameplate production and after the 4.5Y pay back charge. This applies to the price assumptions from the DFS; the reality will not be known until around 2029 at the earliest. EBITA stands for profit after tax, but without further charges. EBITA multiplied by an industry average P/E ratio gives the potential market capitalization for Nameplate Production.
https://csimarket.com/Industry/industry_valuation_ttm.php?pe...
In Q3/23 the average P/E ratio was 12.03
The market capitalization for RNU from around 2030 or later is expected to be A$363m x 12.3 = A$4465m
The current market capitalization is A$218.39m, resulting in a leverage to the current level of A$4465m / A$218.39m = 20.44
Based on the current price of AUD 0.086 with SOI shares of AUD 2.54bn, this P/E ratio would be 20.44 x price 0.086 = AUD 1.76. (fictitious share price with SOI shares remaining at 2.54bn)
This can all be taken from the DFS and should provide more clarity. As RNU only completed the DFS in August 2023, there are still many steps to take to get into production. This is stated in the study:
-Next steps:
Renascor's next immediate steps include entering into binding offtake agreements, completing due diligence for lenders and commencing early contractor engagement. Renascor Resources (ASX: RNU) (Renascor) is pleased to announce the results of a study (the BAM Study) assessing the feasibility of integrating a graphite mining and processing operation at Renascor's Siviour Graphite Project near Arno Bay, South Australia, with a downstream operation to produce up to 100,000 tons of purified spherical graphite (PSG) at Bolivar, South Australia (the BAM Project). The BAM study supersedes all previous studies. Key assumptions are included in Appendix 2 of this Announcement.
It is advisable to proceed according to the rules for letting go. A technical low should form in the 2 area and thereafter, from there a flat upward trend should develop as progress is made, which will steepen as the ramp up to MPP approaches and end in production hype. Stage 1 MPP alone is still a long way from the market capitalization at nameplate and after payback.
The lesson to be learned:
Observe chart development and only act when the bottom has been crossed.
Renascor Resources will be one of the major Cg producers on the market in a few years' time. Until then, some time and patience will be required.
vg gs
