RE:So I have waited all dayHey TaylorLee I only got here and read your challenge today. Furthermore I do not have an MBA, but I have crunched some numbers on the Albany graphite economics. NAV is one way to evaluate this play, but I prefer an analysis that considers retail vs wholesale. For example all possible end user buyers know what they pay retail for synthetic graphite engineered to the purity levels of 99.95 to 99.99 percent.
99.95 % purity sells for say $20k
99.99 % purity sells for say $30k
So today an end user of synthetic graphite such as Tesla needs 99.95 purity and pays $20k/ton. Lets assume now that Tesla wants to reduce their graphite costs 30% or even 50%. In order to achieve this cost reduction goal, Tesla would/should therefore be will to pay the following for Zenyattas Albany deposit.
$20k - 30% = $14k / ton. (Albany has 1m tons X $14k) / O/S shares of 60m = 19.6B/60m =$233
$20k - 50% = $10k / ton (Albany has 1m tons X $10k) / O/S shares of 60m = $10B / 60m = $166
To the synthetic producer who is going to sell that 99.95 % pure battery grade for $20K the economics are about the same only they eliminate the approx. $6k of cost to produce, with the cost to mine Albany of $1-2k.
The synthetic producer however, also has ability to sell graphite powders for $30k per ton. Subtract say $3k for cost to mine and produce the 99.99 pure graphite leaves you with 27k profit margin. At 30% margins..........well you get the idea.
2014 should be a really good year.
Muff