Hey guys looks like I made a bit of an error with my forecast for the Bitumen revenue, I had it as 650kg of bitumen per ton but its actually 650kg of hydrocarbons of which 60% is bitumen, so even with my adjusted forecast the projected $100m revenue from the bitumen seems very conservative to me.
I hadn't seen the presentation where he made this forecast so thanks for pointing that out.
I made my projection quite simply from a recovery rate of 650 kg of hydrocarbons per ton of Torbanite, updated now to 60% of that 650kg being bitumen so approximate bitumen per ton being 390kg. At peak operation the mine will process 700,000 ton (pa) of Torbanite so 273k ton of bitumen (pa) current market price for Bitumen ~ AUD $515
273k * $515 = ~$140m
This is just back of the envelope stuff, and remember those are international prices, meaning shipping costs would need to be added as the majority of our Bitumen is imported, this supply coming from within Australia with lower transportation costs making it more competative for an offtake partner..
So with all that in mind $100m revenue for the Bitumen seems very conservative which is prudent of NB as it shows his integrity, even at those levels with EBITDA of $50m, a market cap of $500-$750m on the Bitumen alone would still be reasonable.
Remember the other 40% of those 650kg hydrocarbon's per ton is valuable bi product too, so another 182k tons (pa) of hydrocarbons is no small factor to be disregarded
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