Things look lots better than the present share pri
I believe the average graphite price per tonne used in the PEA is on the low side because the values only included $/tonne values for the +100 mesh, (-100 to +200 mesh) and -200 mesh. I believe in their rush to get the PEA out, they decided to wait on the average dollar value for +50 mesh and to be sure about both the respective percentages of +50 and +80 mesh in the ore body.
The (-50 to +80 mesh) priced at $2383.82/ton did not include its ore body percentage and its $/tonne contribution couldn't be given, while the +50 mesh Jumbo flake didn't include either its $ /tonne value or its percentage in the ore body, so the Jumbo flake $/tonne contribution was also not given.
If the Jennings Capital's percentage values for +80 and +50 mesh given in the excerpt from the report below are close to being correct (and they know better than we), the average $/tonne sales value of the graphite should go nicely over $2,000. Using just 20% each for the the +80 mesh Large Flake at $2383.82 and 20% for the +50 mesh Jumbo Flake and my guesstimate of $2,750 for the Jumbo Flake, I'm getting ~$1955/tonne sales price say ($2000/ tonne) as opposed to the $1,564 Graphite sale price in the PEA. Note: I adjusted the former values that calculated the $1564/tonne figure by 60% to arrive at the ~$1955/tonne figure after adding 20% for each for +80 mesh and +50 mesh.
See the excerpt taken from the Jenning's Report.
https://www.stockhouse.com/bullboards/messagedetail.aspxs=EGZ&t=LIST&m=31730399&l=0&pd=0&r=0
exerpt...
”Appears to be a Predominantly Large and Jumbo Flake Graphite Project Located at Surface: Initial samplings indicate that between 25% and 35% of the Molo deposit could be plus +50 mesh (jumbo flake) and approximately 50% could be +80 mesh (large flake). Jumbo and large flake graphite fetches premium pricing relative to all other grades.
In trying to figure the rough profit based on the PEA data, I applied one exception. If they did as planned in the PEA and financed the estimated CAPEX with 42% equity (or $69.817,000) and 58% debt ($98,961,000). The $69.82M equity after considering the 75% JV at today share price would add 235 million new shares and major dilution. Thus my numbers assume 100% Debt Financing for the CAPEX.
The calculation applied the Mola JV interest and that the total CAPEX cosst was provided thru Debt Financing, then the other costs, such as the mining of waste and ore, ore processing, concentrate shipping, front office expenses and removed them from 75% of the 84,000 tonnage sales at $1564/tonne and applied the Madagascar tax and came up with 16 cents per share in earnings based on 200 million shares. If the sales were at ~$2000 per tonne after considering the +80 mesh and +50 mesh each contributing 20% to the average sales figure, the per share comes to about 26 cents in earnings on 200 million shares.
On either of the two figures, our shares have to be worth much more than 21 cents, especially if taking Jennings 25% to 35% estimate for +50 mesh and 50% for +80 mesh. It would mean about ~30% for +50 mesh and approximately 50% for +50 mesh so the other values would only be 20% at the $1564/tonne sales figure. Using 30% of +50 mesh at $2750/tonne gives $715 and 50% of +80 mesh at $2384/tonne gives $1,192 and 20% at the $1564 combined other types gives ~$313 forr at total average sales price of $2,220/tonne for the average of all types of graphite sold and be 42% higher than the $1564/tonne price usedin the PEA.