If you have a financial background its easy enough to work out the EBIT (~$650M pa) and NPV (~$3B to $4B depending on NdPr price). I did a breakdown of it in one of the threads.
Costs increasing impact the capital cost, and yes they will be up, but insignificant compared to the impact of NdPr (remember DFS was done at $87 kg AND included contingencies and conservative values for capital costs).
Operating costs are circa $23 kg from memory. NdPr sitting around $150 kg at the moment and some forecasts have this going up even as high as $300 kg (that would make for an insane NPV and share price!).
The one huge thing that affects ARU valuation is NdPr price. Is it going up oir down?
> Answer: Up. Massive supply deficits forecast (as they keep saying, you need a new Nolan's every year).
So is there enough NdPr from Nolan's to go around?
>Answer: No. What happens when demand > supply? Anyone who has done basic economics can answer this. Also Google 'Porter's bargaining power of suppliers'.
Add to that Government position - i.e. do they see this project as too important.
> Answer: Yes (its called out in the Critical Minerals Strategy).
Risk?
>Answer: No. I repeat, there isn't enough of this to go around.
- Aus and USA Govt support Critical Minerals as... critical!
- Foundation customer: Hyundai. Not GoGo Mobile. Not MG. Not Holden. I drive a Huyndai (and I can assure you I wont be sinking money into an ICE as my nexy car). How many of the things do you see on the road? A lot more than Tesla thats for sure. Probably more than any other car.
- $300M loan from Aus Govt. $30M grant. This is not being done because the Government thinks Nolan's is a gamble. This project, unlike others, isn't in Africa. There is no soverign risk. In fact, the opposite, the Govt wants this, and not just for the critical strategic needs it provides, but also for the 600 construction jobs, and the 280 ongoing jobs. You can times this by 6 for the flow on effect to the region and country.
Which of the Rare Earth wannabes have the best resource?
>Answer: ARU.ARU has a lot more than they even have in their 40 year project. The resource is still open. It could be a 100 year project (be going after we are all gone) or if the world needs more NdPr (see above) they could ramp it up and pump more out.
No other wannabe has as much NdPr.
ARU are comparable to Lynas in NdPr tpa. A bit under.
Are Hyundai... and VW, and Detroit, and Japan going to make more electric cars?
>Answer: Yes. Its passed the inflection point of critical mass now. Many people now fear buying a new ICE vehicle because, rightly, it could lose a lot of value soon (not saying ICE cars will be obsolete soon, but the depreciating value placed on them will increase). Fuel prices: High. Climate concern: High.
Who would you want to be your customer if you were a supplier? Tesla?
>Answer: Hyundai or Toyota. Everyone wets their pants when it comes to Tesla and investing, but who's seriously going to be pumping out the most mass produced cars? This is what matters for ARU. We've already gotten in bed with Hyundai. Couldn't be better (haven;t looked at numbers but I see more newer Hyundai on the road than anything else, Toyota even).
Is Nolan's going to go forward?
>Answer: See above Q&As. No brainer.
So if it is going to go forward, what will the share price do?
>Answer: Up. Alot. Simple valutaion economics and strategic value. Ultimately share price will reflect at minimum NPV and EBIT value, and strategic 'too important to fail' status.
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