What a concept, as fTN and G describe. IMO it would be a smart move for Tesla in its current situation and wanting NA Supply that is long-lived for a unique product, and has currently at a minimum, ½ the resource for 22 years.
As pointed out, the us$411M Capex aside (with $80M in contingencies), it’s the supply for 20 years and avg pricing of $2055 that’s a no brainer and thoughts of a big bonus for non-dilution of ZEN shareholders.
I see the Markets Value at c$95M MCap, still doesn’t understand ZEN, nor register the future supply/demand imbalances in the clean industry growing potential and the future as a critical material forth coming and that uniqueness of the Albany Hydrothermal Graphite can provide for the markets.
ZEN’s very conservative PEA quoted pre-Tax NPV at us$614.7M, discounted at 10% for a IRR 27%, and
After-Tax NPV us$438M (10% Discount) with IRR 24%.
(ZEN will be reporting in CAD, pre-Tax NPV will be c$762.8M, after-Tax c$543M)
I guess the Market doesn’t understand what NPV means.
I thought it meant the Net Present Value today, which would mean our shares should be valued between c$8.90 – c$12.50 (based on cad 80.62) and some think maybe only at 30% NPV is in order, following that of others in the misunderstood graphite industry PEA’s.
Still at 30% shareprice should range c$2.67 to c$3.73 (after-tax to pre-tax NPV)
Hardly justified is todays c$1.55 value.
NPV are cash flows that are discounted to give the real market value today.
“If you have a string of cash flows that extend over a number of years, it is hard to decide what the value of those cash flows are. NPV is an attempt to get a measure of the value of those cash flows boiled down into one number. So we first decide on a discount rate. That discount rate should be the minimum rate of return that you would be willing to accept on your money. So then you reverse compound each of your cash flows to the present. So if you have a cash flow of $1000 that will occur 2 years into the future and your discount rate is 8% then the present value of that cash flow would be $1000/((1.08)x(1.08))=$857.34. So if you have a cash flow at 4 years in the future you would divide by 1.08, 4 times. You get NPV or the Net Present Value when you take all the present values and net them together.”
My PEA NPV numbers show higher values than ZEN reported (ran the numbers multiple times) with Capex us$411.465M over 22 years.
Try it out, http://www.business-analysis-made-easy.com/NPV-Calculator.html
Pre-Tax NPV us$1.021B at 10%, IRR 39.7% (Net Rev $5454 x 30 ktpa = us$163.62M over 22 years)
After-Tax NPV us$553M at 10%, IRR 26.6% (Net Rev us$110M)
Shareprices? C$11.23 to c$20.75 (aftertax to pretax) and at 30% there of c$3.36 to c$6.22
Based on a most conservative PEA!
There is hope in ZEN getting Fair value but not by this Market!
Cheers, Mark |
