RE: RE: Presently, its about Frac sandSomething went wrong in the expression of earnings for various frac sand prices, this is my last attempt.
https://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.
Using the 1.34 million throughput data in 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), or Can $9.06 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 and zero taxes due to Minago 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 a 9% 10year loan and 320 million shares.
At Can $40/tonne
Sales – (principal and Interest + cost of sales)
40.7 – (11.0 + 9.1 + 3.5 +1.5)/320 = Can
.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 = Can
.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 = Can
.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 = Can
.30 per share
I understand that Frac Sand production can be increased as much as 3x 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.