Kevin: The company completed Phase I Basic engineering on 17-Sep-97, and on 6-Oct-97 issued a press release which detalied the results (see techstocks.com. This is a major advance: the company now knows the cost of the project, and has a very good idea of how long the mine will operate, and how much they can make. All this is of course an estimate, but if basic engineering is complete, then this is really the final estimate which they will use to go and get financing.
Here's what they think the costs will be: "The initial cost of the process facilities is estimated at U.S. $59 million. Additional support infrastructure such as mine facilities, roads and water supply will add U.S. $13 million to the initial capital costs. Total project costs through to startup in 1999 are projected at slightly over U.S. $ 100 million, including contingencies",
and when the project is going:
"Revised financial models indicate that at current market prices, the Company would generate sales of approximately U.S. $55 million annually. This would increase to U.S. $75 million when the potassium nitrate line is brought on stream. Net pre-tax income is projected at U.S. $31 million (before depreciation) increasing to U.S. $41 million with potassium nitrate production. New reserve studies indicate project resources of a least 21 years of production. The internal rate of return on a 100 percent equity basis exceeds 25 percent."
So right now, the company is out looking for $100MM.
Regards,
John Sladek
techstocks.com |
