platreef economicsThe mine plan in the feasibility study calls for 5 grams 4PE (about a $1k/oz basket) plus .17 nickel and .35 copper, which, after recoveries, is about $160-180/t at best for the highest grade portion of this mine. The NSR cut-off is 80 per tonne. So you have a 50% operating margin. At 4 million tpa you have 400 million in EBITDA. Given that studies are optimistic about cost and resource estimates often fail to account properly for dilution and other technical disappointments, I would prefer to use a 100 cut-off and 150 basket, so 50/t operating margin, which is 200 million a year. After royalties, taxes, sustaining capital, etc., it could be much less. But it would be at least five years, probably longer, to pay back the billion dollars in debt with no escalation. And the mine is 3 years from production (the start of ramp-up) on the forecast schedule. So it is really ten years before the mine sees a profit, and only 64% of this accrues to Ivanhoe. Yet the phased ramp-up will mean even longer till free cash flow. But after mining the best ore in the first few years, the grade falls to 4 grams, and then below. There is a possibility of finding high-grade once down there and mining it, but the deposit has been drilled off pretty thoroughly, and the reef is fairly continuous. Profits could be higher if metal prices rise. Hard to see how they would sky-rocket, given poor demand drivers, as fuel cells look like a no-go other than for "special purpose vehicles", diesel is stagnant as Europe, and the one bright spot of palladium gasoline catalysts in China should be moderated by thrifting, substitution, and the EV revolution. Point being platinum may rebound a little, and palladium may stay strong, but the basket seems likely to stay not far above 1k/oz in real terms. Correct me if I am wrong but this mine seems marginal. And who is showing up in South Africa beating the door down to invest a billion and a half in a country with questionable tenure, a recent mining history of labour triumphing over capital, and an emerging anti-colonial politic painting a target on the foreign mining companies?