So much doom and gloom from the faithful this week. Both AJM and COVID disruptions have negatively impacted the SP, the FA and outlook remains positive (most of the negative news is outside AVZs control). A fellow shareholder who is not a fan of HC asked me what the outlook would be for AVZ based upon today's SC6, assumed sulphate and Tin pricing ? Could AVZ be the next AJM ?
My reaction is always to DYOR and make an informed decision. After posting my views yesterday on the updated DFS, I thought i would play around with the numbers based upon a SC6 price of US$440/t, Sulphate of US$4,801/t & Sn at US$18,000/t.
My short answer is even in today's market, AVZ would still be profitable at current pricing. Yes Sn is our shining light (and would be bringing home closer to 15% of our revenue, not the 5% mentioned by NF). But hey, when that Li wheel turns the other way in 2021, this project is A+ ! IMHO DYOR etc etc
![Smile](styles/default/xenforo/clear.png)
Production | Units | DFS | Oct-20 | Current Li Prices |
Material Mined - Ore | Mt | 93 | 140 | 140 |
Total Material Mined | Mt | 137.2 | 182 | 182 |
Revenue | | | | |
Net SC6 Price (Assumption Price) | USD/t | 674 | 674 | 440 |
SC6 Production | t | 11,354,174 | 17,092,305 | 17,092,305 |
Net Primary Lithium Sulphate Price | USD/t | 7,355 | 7,355 | 4,801 |
Primary Lithium Sulphate Production | t | 938,321 | 1,412,526 | 1,412,526 |
Net Tin Price | USD/t | 9,955 | 18,000 | 18,000 |
Tin Production | t | 62,699 | 94,386 | 94,386 |
Net Artisinal Tin Price | USD/t | 9,955 | 18,000 | 18,000 |
Artisinal Tin Production | t | 12,659 | 12,659 | 12,659 |
SC6 Revenue | USD M | 7,649 | 11,515 | 7,521 |
Primary Lithium Sulphate Revenue | USD M | 6,901 | 10,389 | 6,782 |
Tin Revenue | USD M | 624 | 1,699 | 1,699 |
Artisinal Tin Revenue | USD M | 126 | 228 | 228 |
Construction Costs | | | | |
Mine | USD M | 7.1 | 7.1 | 7.1 |
DMS Plant | USD M | 166.58 | 166.58 | 166.58 |
Primary Lithium Sulphate Plant | USD M | 178.62 | 178.62 | 178.62 |
Hydro Plant | USD M | 46.54 | 46.54 | 46.54 |
NPI | USD M | 30.88 | 30.88 | 30.88 |
Roads | USD M | 41.85 | 41.85 | 41.85 |
Port | USD M | 2.04 | 2.04 | 2.04 |
General and Admin | USD M | 22.27 | 22.27 | 22.27 |
Contingency @ 10% | USD M | 49.59 | 49.59 | 49.59 |
Operational Period Costs | | | | |
Mining Costs | USD M | 761 | 1,009 | 1,009 |
Processing Cost | USD M | 1,944 | 2,579 | 2,579 |
Transport Cost | USD M | 3,153 | 4,183 | 4,183 |
Artisinal Cost | USD M | 76 | 76 | 76 |
G&A Cost | USD M | 361 | 479 | 479 |
Royalties | USD M | 536 | 711 | 711 |
Sustaining Capex | USD M | 92 | 122 | 122 |
Closure Costs | USD M | 19 | 19 | 19 |
Project Net Cash Flow Pre-Tax | USD M | 6,942 | 14,108 | 6,507 |
Project Net Cash, Post-Tax, All Equity Basis | | | | |
VAT Tax Paid | USD M | 897 | 550 | 550 |
VAT Refunded | USD M |
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Income Tax Paid | USD M | 2,344 | 3,109 | 3,109 |
Export Tax paid | USD M | 765 | 1,015 | 1,015 |
Import Taxes Paid | USD M | 29 | 38 | 38 |
Project Net Cash Flow Post Tax | USD M | 3,779 | 9,395 | 1,795 |
Project NPV 10% Post Tax | USD M | 1,028 | 2,556 | 488 |
Project IRR Post Tax | % | 33.15% | 82% | 16% |
Payback Period Post Tax | Years | 2.2 | 1.2 | 4.1 |
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Base Case - DFS Based upon 60% Ownership |
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Updated - 75% Ownership, Increased Sn Price, 50% Reduction in VAT (SEZ), Increased Ore Reserve |
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Current Li Prices - Same Updated FA, with moderated SC6 and Li sulphate (current assumed) |