Conference Call Conference call went well.
1) LSQ will be in lowest quartile of costs. Slightly less then Thurso.
2) Equipment in great shape. Nitrogen lined ensuring no rust. Many large investments have been already made by the previous owner that would cost over $500 million today to replace.
3) Costs will be $538 per tonne, after Co-gen expansion, about $600 per tonne before that.
4) Total cost for both mill and co-gen $222. $20 to $25 million in 2012 and the rest in 2013.
5) Will evaluate if they will produce NBSK before conversion. Will know in a few months.
6) 236,000 tonnes production estimate before de-bottlenecking. May improve a little once they get into it.
7) Mill will not suffer a loss of productivity if they want to go up on the quality scale towards specialty pulp. Specialty pulp sells at a much higher price.
8) Warrants will be priced at the market when they are issued. Should have 2 year exercise date.
9) Will not be utilizing the sawmill, except to store and chip wood. Will provide a lower cost from this. Mill has an integrated chemical plant that will also lower costs.
10) Current DP prices around $1160 per tonne. What they see is when prices get below $1,200 per tonne, capicity just shuts down. Chinese capacity is all over $1,100 per tonne in cost.
11) All environment risk is taken by the Quebec government except for a requirement to invest $7.5 Million over 5 years into a remediation fund, by FTP.
12) Should be eligible for other Federal grants.
13) $222 million investment = $40 million for Co-gen and $182 Million for mill.
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That's about it. What a find. About a 100% return on investment, annually. Let's go get another one.