James Marsh - MD Interviews, page-12

When I do a new sum of the parts valuation I will come up with something along the lines of the below ( which is very speculative ).


Assumptions:

1. High quality of ADN's feedstock allows lower OPEX (so this is factored into assumption 3 below).
2. Price based on FYI DFS estimate for 4N at USD $24,000/t.
3. ASIC based on a JV/tolling arrangement so using USD $12,000/t instead of ~ USD $6,000 per tonne in FYI DFS.
4. ADN gets 75% share of EBITDA.
5. Share Issue 2.6B ( assumes that cashflow from Great White allows dilution to be kept to a minimum )
6. Cashflow from Great White's Premium Refined Kaolin business and Halloysite business allows them to use traditional debt funding rather than other dilutive approaches.
7. Business starts in ~ 2026.

Here's the results for 4,000 tpa, 8,000 tpa and 12,000 tpa. Result is ~ $40M to ~ $120M added to net profit depending on annual tonnage.



So that's just one possible scenario above - ADN pays a tolling fee to a processor and then gets a 75% share of remaining margin.

That's what it might be worth in production. Could add up $30M to $100M after tax on scenarios above.

A sum-of the parts value would include HPA as a risk-adjusted component of the above in an overall valuation.

They have said much recently about HPA, other than they are sourcing partners so there could be a surprise announcement at any time.

One big advantage ADN has is the size of their deposits so gives them a lot of potential to scale beyond production allocated to HPA beyond capacities above.