Hi Folks, the same sheet at the start of this thread has been updated now with Scoping study numbers - just the capex and metal production has been updated. I have left my inferred operating margin as it was, as it looks like this was more conservative than the scoping numbers and so gives us some buffer from any hype factor.
You will see I have highlighted two rows in Orange, to me these are looking like pretty conservative, sensible scenarios for ARL, using price assumptions for metal closer to CLQ price assumptions, with Co at $30/lb in both scenarios, and Nickel ranging from $5/lb to $8.84/lb. Exchange rate in mine is .788, so builds in further conservatism compared to peers, and current exchange rate.
You will see EBITDA at $290-$340m in these scenarios (AUS) comfortably paying 10% debt on 15yr term being $155m/pa.
At 15% debt on 15yrs, which I think we all have to agree is a fairly outlandish rate for that term length, and an absolutely extreme worst case (almost not worth considering it is so extreme) finance payments are $200m/pa. i.e. even at that level, with metal pricing below current prices and completely at odds with every analyst forecasting an emerging deficit for cobalt and/or class I Nickel over the coming 2-3yrs, we are clearing $90-140m/pa.
Agree with other comments, we seem to be looking at the standout Nickel/Co play on the ASX right now, arguably by some margin.
ARL Price at posting:
86.0¢ Sentiment: Buy Disclosure: Held
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