[caveat - am doing this note from memory as I am pretending to watch a French rom-com with the missus] .... $60 covers all up costs and I understand has verbal support from Societe so long as we can pay for c. 20% of the debt of capital or about $100m - which a skyrocketing market cap from a binding off take at $60+ would support. Very confident VMY would have no hesitation to do a deal at $65 USD. My concern is that DFS and financially modelling/NPV was done at 70c AUD. Massive sensitivity on the NPV modelling and for bank approval. I called out in a number of professional circles about 18 months ago that RBA will drop rates x 2 by the end of 2019 based on housing data I was seeing, and policy that was being implemented. Getting more likely I am right unfortunately. RBA already know it - they just need to ease it into their narrative to save face. Point is a drop under 70c (possibly to 65-67) is highly likely. It means that Australia will be in a tough place, but probably and unbelievably will be perfect timing for VMY
$65USD and hedge 65-70c gets an NPV of >$700m - larger than the $500m-ish NPV in DFS. And remember that is only based off the 50m pounds, not 90m pounds.
- industry sentiment, plus - news of resource expansion at alligator/such wow
wood place a rocket under share price if VMY had any reasonable contract in place. So securing a deal would amplify and multiple results - and see VMY selected in any/all specialised funds (yellow cake, tribeca etc is just the start)
next six months will be really interesting !!! whilst the early kicker to sp will come from long term contracts negotiated post s232 (probably start July) fingers crossed for a little funky spot price action. Anything above $33 will see natural support for VMY market cap and hopefully all ready have it at $100m by the time the fireworks (hopefully) start in Q3
