Obviously NPV analyses are very difficult in the setting of unknown future RP prices.
IF the do reach the 1MT early and 3MT later production targets then valuation is enormously leveraged to RP prices while they linger near cost.
A $10 change in RP prices ads about $30m in annual profit when (if) they are in production at 3MT/yr, and hence at NPV discounted at 10% value is increased by about $200m - obviously that need to be discounted further for the few years to get to that production target. If RP prices jumped to around half of recent peak ($450/t), say to $200-$250 per tonne then NPV becomes enormous, and if by some miracle it does exceed $400/t the value runs into many $billions if that price is maintained. This is very unlikely to happen, as with prices sustained over $250/t there will be enormous development of new resources and expansion of existing operations so any peak much beyond $250/t is likely to be short-lived (1-2 years max).
Interesting times - looks like mid-high 30's is going to hold barring catastrophy so probably a fair time to buy.
AEV Price at posting:
37.0¢ Sentiment: Buy Disclosure: Held
