An interesting look at "mistakes". This SH post should be of interest for those with their eyes even partly open. It would be nice to get a response to this referencing the PEA..........
hoov
ValuHunter, since you asked....
"I know this sounds crazy but I challenge everyone to find where I made a mistake."
All righty, then. Your post in bold.
There are 3 key items to purchase for a buyer at this point.
•cost of the 65m shares
Ya, that's how you control a public company.
•Infrastructure costs of $400m CDN or $240m USD
Nope. I'm assuming you mean initial CAPEX? That's $411.4million USD. At today's exchange rate, that's $598.0million CDN.
•cost to process from ground to customer location =$2046 per ton.
Nope, that's an estimate of the costs, with all sorts of costs not yet included. See P 21-8. Moreover, that is the estimate for caustic baked material, which is not yet "customer ready".
•there is 1.4 m tons of material in total.
Nope, again. The PEA reported 968,000 tonnes of contained graphite, with an overall recovery 0f 75.40%, yielding 730,000 tonnes.
As per the PEA on Page 19-5 the cost to produce high purity synthetic graphite runs from $6k - $10K USD per ton. For simplicity sake lets assume a buyer wants to get his graphite costs down to $10k USD per ton, all in costs to accomplish a $100/kw price point, for thier finshed product.
Relevance? There are no costs in the PEA for yield loss on shaping, cost of shaping, or coating the graphite, nor any references to particle size.
Infrastructure cost /ton = $240m/1.4mton = $171.42/ton USD
You've only included the initial CAPEX, and nothing for sustaining capital. That's an additional $291.4million USD (and does not include anything for permitting, pit dewatering, etc.), for net capital of $702.8million USD. For the yield of 730k tonnes, that's $962 USD/tonne.
Cost to process ore to finished product = $2046/ton USD
Nope, that's an intermediate product.
Total cost of 99.9+% pure graphite = $ 2217.42 USD
I'm at over $3000/tonne, and without even getting a finished product yet. Don't forget, the project's NPV goes to zero below $5000 average revenue/tonne. This cost to produce is one of the reasons why that is true.
Fix costs of Graphite is $10k/ ton - Total processing cost of $2217 = $7782.57 USD/ton
Now you're imagining you'll get $10k/tonne?
Therefore, a buyer with a target of 10k per ton over 30 years of supply would pay 7782 X 1.4m to =
10,895, 600,000 USD for the Albany deposit or $167 USD per share.
Why would an end-user take on the risks of the project, if they could pay that same price for graphite from another source? Your argument has no merit.
If I use the selling price of $7500 USD as per the PEA you get a per share value to Zen holders of $123 USD. I know this sounds crazy but I challenge everyone to find where I made a mistake.
RPA set the after tax cash flow at $1999million over the life of mine. And that's not all profit, right? Or, do you think it is?
Honestly, I don't think you got a single thing correct. But that's what you get for attending the LTGOldBull Skewl of Spreadsheet Distortion.
You got 20 recco's for that post?
Anyone who wishes to, can copy this back over to SI.
Lar
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