RNU Valuation - Siviour Project

DYOR. Not financial advice.
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This is an estimate and projection based on a simple extrapolation. Do not treat as a formal estimate / valuation. Intent is to provide a general indication of potential only, assuming the company achieves the milestones set out in their production plans and graphite market sentiment remains positive. You are encouraged to do you own research.

We have no recent broker analysis or price targets that take into account RNU's progress since the Siviour scoping study was complete. The last analysis was published in April 2016. See here and here.

My analysis based on a peer comparison of the Siviour Project with Syrah suggests some targets just for the Siviour Project as follows:

• Stage 1 - $0.15 to $0.725 ( assumes production start in 2020 and forward sentiment towards Stage 2 )
• Stage 2 - $1.82 to 3.87

These targets do not take into account further dilution or RNU's other projects and the development of a Spherical Graphite capability.

RNU's current production plans for their Siviour Project were published in their 2017 AGM Presentation.


The AGM presentation indicates the Definitive Feasibility Study (DFS) will be completed by Q2 of CY 2018. Offtake discussions supported by the recent appointment of a commodity advisor may optimistically achieve an offtake by end of Q1 CY 2018.



Assuming an 18 month funding/development/commissioning timeframe from completed of the DFS (end Q2 2018) we may be able to achieve mine commissioning / ramp-up by Q1 2020. This suggests the following dates for the production stages:

• Stage 1 - 2020 to 2022 (years 1 to 3 )
• Stage 2 - 2023 forward (years 4 to 23)

I've used current share price and broker estimates for SYR to extrapolate the potential $MCAP attributable to RNU's Siviour Graphite project. The method is explained in the notes below. A somewhat simple approach but a way to determine potential for the Siviour Project.



Stage 1 is less than 10% of the production capacity targeted for Stage 2. Assuming RNU can successfully commission and ramp-up production during Stage 1 and Graphite Market sentiment remains positive, it's reasonable to assume some forward sentiment ahead of Stage 2. With a Stage 2 lower price target of $1.45, 50% of this (or $0.725) is perhaps reasonable to account for forward sentiment ahead of Stage 2.