Good effort mate, can you re check the opex C1 cost again?, it...

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26/01/21

18:30

Post #: 50451328
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Originally posted by pasdec: ↑

Yep I would think 10mtpa is at the bottom of the range given the Royal Resources PFS figures and studies looking to push it towards 100mpta...I'm not an analyst and I know this has been done before but just flying a kite here ...but with current Fe price about USD169/dmtu probably not sustainable so being conservative I found an avg price between 2003-2019 of USD93/dmtu so very roughly, using base case of 10mtpa x 93=930M p.a.Gross Revenue. Whats' the C1 going to be? Royal Resources had $30 OPEX, I think MGT they are looking to be in the bottom quartile so using figures pulled from llast year (BHP ~11.82, FMG 13.27 wmtu) but because we are using gross figures to dimension the project how about $20 as a WAG (Wild Assed Guess)! To do the NPV and valuation you should use an after tax annual income but again roughly using these figures about $730M p.a gross and 30% tax rate $511M NPAT, then use mine life of 50 years for simplicity (half the 3.9Bn tonnes JORC inferred and indicated, say 2B tonnes at 10mtpa would give a mine life of 200 years if its 100mpta 20 years so 50 seems a good compromise?). What discount rate? Cost of Capital? expected Return rate? Just pick 8% for ease. CAPEX Royal DFS said $3-3.5Bn but low strip and given Next Ore let's say 2.5Bn to be on the safe side. That would give us an NPV of about $8.1Bn/3.5Bn SOI, so at production1Q2025 about $2.30/sh given no dilution CR etc . Basically 100 bags 4 years away, but this is not going to be Debt funded so CR or some other mixed funding model, the Sh value accretion slope depends on this and not sure what it will look like? I expect it's a step function with many hurdles and risks along the way, does the world (China) want or need magnetite?) it may turn out to only be a 50 bagger.But then again if/when they get it to production and push it towards 100mtpa Wow!
I did this on the back of a tissue box in a coffee shop so happy for you to point out obvious mistakes in thinking, numbers or anything else I'm not precious.
DYOR, GLTAH, Wombat I miss you on this thread!

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Good effort mate, can you re check the opex C1 cost again?, it is $69/t IMO as per the optimised PFS 2013

MGT Price at posting: 2.1¢ Sentiment: Buy Disclosure: Held
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