Post by
KirklandX on May 16, 2022 8:53am
Pre-Feasibility Study. Simple thoughts.
Just some simple quick thoughts on the Pre-Feasibility Study:
1. Obviously some pretty big numbers in here. The most interesting one for me is the Plant 3 / 10mt pa scenario. As this is due to start construction next year. So is it nearterm, and achievable.
2. Just using the K20 economics (so forgetting the upside of also selling sulphur and micronutrients for now) we have a POST-tax NPV8 of US$2.91 bn. Or C$3,75 bn.
3. Verde has 50.4m shares in issue, so just using the K2O payability of the smallest and most achievable scenario, we have a post-tax NPV value of C$74.40 per share!! This is incredible (if you take in to account the value of the sulphur and micronutrients you get a value of C$101.58 per share. Per share!).
4. To recap, the capex to achieve this NPV scenario is US$53m, and will be funded from cashflow. No equity dilution.
5. Again to recap, the POST-tax IRR of this scenario is 427%.
6. Quite simply this is insane. I've never seen anything like it. And this is the smaller, most achevieable scenario. OMG.
Comment by
KirklandX on May 16, 2022 8:58am
p.s. don't get me wrong, I dont think we will trade to this NPV tomorrow. But even if the market prices in 30% of this NPV scenario then that is a x3.5 share price return from here. I see this as a sign post of where we are heading in the next 12/24 months. And as others have commented, these numbers are using a price assumption of 1/3 the current KCl spot price. Incredible.