US$1 billion of free cash flow per yearBased upon recent meetings with Amazon
management in Belo Horizonte, Brazil and conversations
with staff tasked with the scale-up of the Cambridge
process, we believe this figure could materially
understate the potential of the project.
We are coming to the view, though, that a successful Cambridge process could result in a plant designed
to satisfy all domestic potash demand in Brazil and that cash costs could be closer to US$200 per tonne vs. our
more conservative US$250 per tonne assumption.
? In a world where the Cambridge process scales up well and runs as efficiently as Amazon’s engineering team believes
it can, the project has the potential to generate more than US$1 billion of free cash flow per year. Assuming a
five million tonne per year project and a cash cost of US$200 per tonne, we arrive at an NAV of $125.85 per share.
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