Great post, John. I only disagree with your comparisons to the restart study. I originally held the same opinion, before plugging the commodity forecast into a spreadsheet.
The restart study states annual average production of 21.4kt zinc, 3.6kt copper, 5kt lead, 2koz gold and 370koz silver:
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 0 Metal Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 5.25 Total 1 Zinc t 21400 21400 21400 21400 21400 5350 112350 2 Copper t 3600 3600 3600 3600 3600 900 18900 3 Lead t 5000 5000 5000 5000 5000 1250 26250 4 Gold oz 2000 2000 2000 2000 2000 500 10500 5 Silver oz 370000 370000 370000 370000 370000 92500 1942500
Which matches the LOM production metrics of 112kt zinc, 19kt copper, 26kt lead, 10koz gold and 1.9Moz silver.
When you plug in the consensus commodity forecast from 2016 to 2021 - as a base example (the results are higher if you exclude 2016) - the LOM revenue is A$707m, much higher than the A$628m figure presented in the restart study:
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 0 Metal Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 5.25 LOM 1 Zinc A$ million 64.6 75.6 77.3 77.8 74.9 18.7 388.9 2 Copper A$ million 30.4 31.9 33.3 34.3 34.3 8.6 172.8 3 Lead A$ million 13.6 14.5 14.8 15.1 15.3 3.8 77.2 4 Gold A$ million 3.3 3.4 3.5 3.5 3.4 0.8 17.8 5 Silver A$ million 8.6 9.4 9.9 10.1 9.8 2.5 50.2 6 Total 120.6 134.7 138.7 140.7 137.7 34.4 706.9
If you only use the 2016 forecast, the result is much closer to A$628m, suggesting that the restart study was either using the current prices in 2015, or the 2016 forecast only.
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 0 Metal Qty Unit Price (US$) Exchange Rate Revenue (A$) 1 Zinc 112k tonne 2205 0.73 $339M 2 Copper 19k tonne 6173 0.73 $160M 3 Lead 26k tonne 1984 0.73 $71M 4 Gold 11k oz 1200 0.73 $17M 5 Silver 1.9M oz 17.00 0.73 $45M 6 LOM $633M
At today's prices (as of 10am WST), the LOM forecast is A$743m, 18% higher than the restart study:
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 0 Metal Qty Unit Price (US$) Exchange Rate Revenue (A$) 1 Zinc 112k tonne 2925.50 0.7868 $438M 2 Copper 19k tonne 6366.25 0.7868 $160M 3 Lead 26k tonne 2356.50 0.7868 $82M 4 Gold 11k oz 1291.41 0.7868 $18M 5 Silver 1.9M oz 17.08 0.7868 $44M 6 LOM $743M
The restart study gave a "LOM revenue of $628 million, NPV(8% real) of $84m, IRR of 61% and with strong LOM average free cash flow of $25 million per annum".
I haven't done the NPV calculation, but LOM revenue is well in excess of A$700m at today's prices, which would give an adjusted annualised free cash flow (pre-tax) in excess of A$28m. This also assumes that operating costs have increased at the same rate (>11%) since 2015.
The FA is very strong, and RVR is now 2 months away from mill production and 3 months from concentrate shipment, according to the Diggers & Dealers presentation from earlier this week.
(Note: If anyone is confused by my chart and comments from a couple of days ago that mention a LOM revenue of A$716m, that was using the rounded concentrate totals of 112kt zinc, 19kt copper, 26kt lead, 10koz gold and 1.9Moz silver. The above tables use more the accurate figures of 112.35kt zinc, 18.9kt copper, 26.25kt lead, 10.5koz gold and 1.9425Moz silver)
- Forums
- ASX - By Stock
- RVR
- price falling
price falling, page-33
-
-
- There are more pages in this discussion • 8 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add RVR (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
LPM
LITHIUM PLUS MINERALS LTD.
Simon Kidston, Non--Executive Director
Simon Kidston
Non--Executive Director
SPONSORED BY The Market Online