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Focus Graphite Inc V.FMS.WT


Primary Symbol: V.FMS Alternate Symbol(s):  FCSMF

Focus Graphite Inc. is a Canada-based advanced exploration company, which is focused on developing high grade flake graphite deposits to supply battery grade graphite. The Company's projects include Lac Knife and Lac Tetepisca. Its flagship Lac Knife Project is a 100% owned, high-grade crystalline flake graphite deposit located in northeastern Quebec, about 27 kilometers (kms) south of Fermont. The Lac Knife project is comprised of the Lac Knife property plus an isolated block of 12 CDC claims located 11 kms to the north of the Lac Knife property on NTS sheet 23B-11 (Montagne-aux-Bouleaux property). Its 100%-owned Lac Tetepisca Graphite Project is located in the Southwest Manicouagan reservoir area of the Cote-Nord region of Quebec, one of North America's leading emerging flake graphite districts. It comprises two contiguous properties, Lac Tetepisca and Lac Tetepisca Nord. Together, the two properties form a block of approximately 126 map-designated claims (total area: 6,785.14 ha).


TSXV:FMS - Post by User

Bullboard Posts
Comment by billlcon Dec 06, 2011 9:01am
216 Views
Post# 19294561

RE: Updated Quick & Dirty NPV Analysis

RE: Updated Quick & Dirty NPV Analysis The PEA (preliminary economic assessment - an NPV or DCF analysis) section of the NI43-101 should be interesting. Last March (3/31 - 12:41pm) I tried an estimate. Since then we have had the PP and other changes. Here is an updated guess as to what is coming. Check my assumptions: Capital cost $75m over 3 years or $25m/yr. Production 50000T/yr @ $1600/T (revenue = $80m/yr) for 20 yrs. Cash cost $250/T or $12.5/yr. Depreciation expense $3.75/yr straight line ($75m/20 yrs). General and Administrative expense = 2% of sales or $1.6m/yr. Discount rate 10%. Fully diluted shares = 111.6m. Question: does Focus also get a depletion allowance? Tax rate 30%. The income - cash flow statement:Sales 80mCash cost 12.5G&A 1.6EBITDA 65.9DA 3.75EBTax 62.15Tax 18.645EATax 43.505+ DA 3.75Cash flow 47.255Cash Flows: -25 -25 -25 +47.255 + 47.255 + 47.255 for 18 more yearsDiscounting @10%: NPV + -25 -22.73 -20.66 +47.255[1/.1][1-1/1.1^20]/1.1^2 using the 20 year annuity factor from Brigham's finance text. Answer $264.10m. Dividing by fully diluted shares = $2.37/share but we should get some value from the exercise of options and warrants so let us add another 20c to get a value of $2.57/share. Note Kwijibo is not counted in this analysis.The old answer was $4.87. The drop is caused by two main factors: reducing the sales price from $2100/T to $1600, and the severe dilution of the PP. We should get the company answer in January.
Bullboard Posts