I'm reluctant to post much anymore on MAK due to the nonsense which appears under general MAK postings - but for those who might want to think further than pie-in-the-sky earnings figures achieved by bunging numbers plucked from the air into DCF spreadsheets - get your head around this....
and before I go further, I agree with the demand for Phosphate, and I agree that there's plenty of the stuff at Wonarah..... but.....I'm concerned about the logistics of any potential Wonarah operation even if the stuff was lying on the ground (which it isn't) - a point not taken up by ANY of the ramping posters who appear on MAK threads.... and these figures of 2-3 million tonnes of shipped phosphate per annum - have they ever asked themselves how such a thing is possible? no, of course they haven't...
well, as I pointed out to Yellowcake a while ago I'm no expert on bulk haulage, but I'm not a damned fool either, and my ball park figures could be questioned - though I doubt anyone here has the relevant experience to challenge them - but we'll see....
some assumptions.....
max GVM allowed on roads (vehicle and load) 150 tonnes? subtract 20 tonnes for PM and bogeys = 130 tonne load. A generous figure?
operating days per year - can't be 365, no operation achieves 100% uptime. Given all the factors, heavy loads, maintenance, weather conditions - I'd think an up time of 80-90% was a good achievement. Let's plug in 85%.
opex. The famous $100 per tonne figure. That was calculated some time ago and fuel costs etc have gone throught he roof since then - so that figure would be at least $150 these days?
and then there's the long term market price of phosphate - who knows where that's headed? I doubt though that it will remain stable at $400 per tonne - but that's almost irrelevant to the logistics problem.....
so here goes..... you want to ship ONE million tonnes per year by road? let's see what it means in real terms....
1 million tonnes per year @ 130 tonnes per load working 310 operational days per year this equates to 1,000,000/310/130= 25 loads per day - every day.
that's better than one road train per hour hitting the road - not impossible but a pretty good turnaround....
you want to ship TWO million tonnes per year? then everything remains the same, except now you need a turnaround time which implies one road train hitting the road every 30 mins..... mmmmm..... starting to look tough? I'd say that would require a herculean effort.... I don't know of any small time operation that could achieve that virtually day in day out? but the 'experts' can correct me.....
you want to ship THREE million tonnes per year? now you need one road train hitting the road every twenty minutes? the only way you could accept that, is if you are permanently on exstacy..... but I'm sure there are sufficient numbers of HC posters who would fit the bill....
OK - let's say we go for ONE million tonnes per year at a long term price of $200 per tonne, that's a profit of $50 per tonne which currently averages out to around 50c per share - there will most certainly be 100 million shares by the time MAK gets started....
say we go for ONE AND A HALF million tonnes at a price of $300 per tonne (pretty good figures) and we'll have to bump up the share numbers now to around 150 million shares - not unreasonable - that's a profit of $150 per tonne averaging out to around $1 per share....
I'm not going in fantasy land of 3 million tonnes shipped at $400 per tonne because if you've followed me so far you'll know it's ridiculous at the present time....
so, in my opinion, and using a PE of say 8, that gives a value of between about $5 to $8 as a preliminary target for MAK, assuming it even gets off the ground....
where do the $20 and $30 per share fantasy figures come from? DCF spreadsheets? they are useless at this time because they totally ignore the logistics of any Wonarah operation - once Wonarah is operational, it's a different matter - but there's a long way to go before Wonarah is a reality.....
that's my only post today - make of it what you will.....
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