Presently, its about Frac sandhttps://www.marketwire.com/press-release/Victory-Nickel-Inc-TSX-NI-915618.html
What is calculated below is based on the above news release.
Updated results might have been forecast since that news release, but i couldn't find them.
Using the 1.34 million throughput data from the news release.
Minago could produce 1,017,953 tonnes of frac sand per annum.
Assume Frac Sand at Can $60.00/tonne
Can $ 44 million, Plant cost
Can $ 8.8 million or rail siding
Can $ 16.6 million for mining equipment and
Can $ 1.2 million to bring throughput to 1.34 million tonne
If Victory can arrange a Can $ 70.6 million loan at 9% annually over 10 years.
Annual Principal and Interest (p and i) Cost to Victory
70.6 x 0.155820, or Can $ 11.0 million.
Sales 1,017,953 tonnes at $ 60/tonne, about $61.08 million Canadian,
in sales.
Production costs
(1,017,953 x $8.99/tonne), say Can $9.1 million
Dollar value to Victory before depletion, depreciation, administration and taxes.
Sales – (principal and Interest + cost of sales)
61.1 – (11.0 + 9.1) = Can $ 41.0 million
Annual depreciation over 20 years
70.6/20 = Can 3.5 million
Front office admin of say can $1.5 million annually and zero taxes due to Minago's earlier costs.
Possible earnings on Can $ 60/tonne Frac and 320 million shares…no taxes assumed due to earlier Minago costs….
(41.0 – 3.50 -1.5)/320 = Can
.1125 per share
Earnings at various Frac Sand prices assuming 9%,10 year financing and 320 million shares outstanding.
At Can $40/tonne
Sales – (principal and Interest + cost of sales)
40.7 – (11.0 + 9.1 + 3.5 +1.5)/320 =
.05 per share
At Can $60/tonne
Can
.11 per share (See above)
At Can $80/tonne
Sales – (principal and Interest + cost of sales)
81.5 – (11.0 + 9.1 + 3.5 +1.5)/320 =
.18 per share
At Can $100/tonne
Sales – (principal and Interest + cost of sales)
101.8 – (11.0 + 9.1 + 3.5 +1.5)/320 =
.24 per share
At Can $120/tonne
Sales – (principal and Interest + cost of sales)
122.2 – (11.0 + 9.1 + 3.5 +1.5)/320 =
.30 per share
I understand that Frac Sand production can possibly be increased by 3x of what is figured above.
Pluses
Frac Sand eanings plus the nickel price outlook can drive the share price
Money earned by Frac Sand operation can be applied to increasing total reserves, resources and recoveries at Victory's other properties.
Also removal of some overburden at Minago could help in expediting mining operations. If this occurs, the Frac Sand material can be excavated and stored at designated surface location.