The additional CAPEX for dry processing in Australia will be funded from sales of refined product (ADN's DSO refined overseas under a toll-processing arrangement). This kick-starts high-margin sales from the get-go. A margin of AUD $304 per tonne for an average 187,000 kt pa sales ( price AUD $700 per tonne, AISC $396 per tonne ).
Average annual EBITDA = AUD $304 x 187,000 = AUD $56.8M
This is enough to fund the dry-process plant (AUD $28M) from approximately 12 full months of nameplate DSO production (year 2).
After option conversion, balance of funds required for startup CAPEX and working capital could comfortably be achieved from an offtake pre-payment. This may or may not require a parallel equity component.
ADN Price at posting:
3.6¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)