RE: my post from april 14 ? We have begun to sharpen our pencil recently regardingthe potential upside of Amazon’s Cambridge process.
The Cambridge process could allow the company to
produce a conventional potassium chloride (KCl) or
potassium sulfate (SOP) and could potentially generate
up to four billion dollars of value for Amazon shareholders.
? We have previously put forward an NAV of $42.12 pershare in the event the Cambridge process is successfully
scaled up. Based 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.
? Our original Cambridge NAV was based on a two million tonne per year operation at an operating cost of US$250per tonne. 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’ engineering team believesit 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.
Fantástico