RE:RE:RE:RE:RE:RE:RE:RE:RE:Rbc app I have only some rough idea on some rough digging at what it might cost to capture one ton of HPA to achieve 4N process and it looks like anywhere between $3,500 to $8,500 so you can drive a truck through that but it does give us an idea of the margins here loosely speaking that is. At $20,000 - $25,000 per ton for HPA at 4N and 5N purity. So the margins are great to say the least. Ranging from $11,500 to $16.500 at an HPA price of $20,000 to $16,500 to $21.500 a ton for HPA at $25,000. While that's not $62,500,000 It's not bad at all. And it still scales across multiple mines to a billion in the USA Alone with 6 mines.
5000 HPA tonnes per annum x 6 mines = 30,000 tones of HPA at an average marginal rate of + $20,000. (optimistic guess here maybe more like 15,000 16,000 aisc average) still juicy.
30,000 x $20,000 = $600,000,000 x 3 years revenue (EBITDA) $1,800,000,000 (1.8 billion)
without CMR, without Nyngan, and without the patents licensed. Without Lithium brines.
Without advertising or marketing of any kind. Just the cold hard numbers give or take from HPA alone.
What will be of concern if we light this candle is getting trapped into a long term contract well below raising market valuations for HPA. If HPA starts to go to $30,000 then $35,000 a tonne does SCY only participate at $25,000 for 3 to 5 years. That could be bad in one sense but it would allow stable valuations for fund managers. If they do a year over year contract, what does that open the door for? That to could be bad if the patent is not granted or the price of HPA declines and the costs to recover it go up. But by all rational models the price of HPA should go up more with greater adaption of EV's and the costs of recovering it should in theory go down as the process gets fine tuned. Also lets not overlook the fact the NGM people will know about this process and all it’s secrets. So do we remain joined at the hip now? What kind of NDA did they sign? The patent is very important here. A lot of valuation upside can be derived from it, also a lot of take over premium.