Post by
DodgingBullets on Aug 01, 2023 11:27pm
This might actually be a Unicorn...
Summary: Forget the Tatooine BC project (which is the only info on their website) This new Brazil deal (with a state run company) is fully permited for 1.5 million tons per year, goal is around $200+/ton profit. We are talking 100's of millions in PROFIT (not revenue) at full capacity. 50x anyone? Now lets be realistic, this wont happen overnight, but I think we see steady growth as this company hits milestones and ramps up. The important thing to realize here is that this isnt some explorer praying on a good drill hole, these guys have the goods already and now a deal with the government. This will be all about securing contracts and purifyng the silica for even larger profits. I copied a post below, from a very knowledgeable guy, who knows a ton about this space. See for yourself, do your own DD.
"Many of the best silica resources in the world are stuck waiting for environmental permits. Sitting with massive offtake agreements waiting for that permit to come through, but unfortunately most will never get them due to marine life disturbance, first nations settlements etc.. HMR has avoided all of that and has direct access to one of the most premium assets in the world. All in all, pretty big deal because the Brazillian gov't will NOT just sit down with anyone. Not sure how Brian got his way into these deals but I am so happy to be apart of the success
Infrastructure in Bahia is only getting better and better with road and rail, this property has a direct access road to multiple ports on the coast with plentiful room for operations. Has water, gas, low-cost labor ready to work, government support. Now port use would add additional cost to cost of goods sold, which was roughly estimated to be $40 USD / tonne of material after processing to the closest port, and $60 USD / tonne after processing to the furthest port.
That is for international customers but CEO has made it clear there is enormous demand for this product in LATAM and Brazil specifically as they aim to become the solar capital of the world. So shipping domestically would drastically reduce COGS.
So lets take the top end of COGS even $80.00 / tonne of material if you are shipping internationally. That product will be upgraded to Medium to High Grade HPQ which will fetch a price of a minimum $300 USD / tonne.
Now lets take a lowest end estimation of 100,000 tonnes sold / year with profit margin of $220 USD / tonne. That equates to $22M in profit. Most Offtake agreements I have seen are for minimum 400k tonnes / year. I remind you there are multiple Australian companies who have 400k tonne per year offtake agreements for product with good Si02 levels, but high aluminum and iron content that would require further processing.
So for fun lets look at a top end projection for this Bahia Supply alone. It is fully permitted for 1.5M tonnes annually with potential to permit further concessions. It has a mine life that would far succeed my life and my childrens (If I have any). This is an industry that has SCALABILITY. If you have the right infrastructure in place (labor, machinery, logistics etc..), you can scale as the operation is simple and profitable.
Top end HMR scales the business from 100k tonnes / year to 1.5M tonne / year. With profit on the LOWEST end of $220 / tonne we are looking at profits of 330M / year. Hmmm... anyone else see why we think this is a unicorn??"