Pre-feasibility NAV estimateIf you are getting a large number like $300M+ (NAV5%), could you please show your work.
My calculation is based on 300,000 tons per year DAPR only as stated in the July news release.
Annual production: 300,000 tons
Revenue/ton: $170
Revenue: $51,000,000
Cost/ton: $120
Opex: $36,000,000
Margin: $50
EBITDA: $15,000,000
Net income: $10,000,000
Attributable to FCV: $7,000,000
The question is, what discount rate to use and what CAPEX. Assume CADUSD = 0.72 and 116,000,000 shares outstanding.
8% discount
$50,000,000 CAPEX
NAV8% = $17,000,000
= CAD$0.20/share
5% discount
$30,000,000 CAPEX
NAV5% = $54,000,000
= CAD$0.64/share
So I think the NAV should come in somewhere between $17M and $54M or 0.20 to 0.64 $CAD/share. I think the share price will stay between 0.1 to 0.3 multiple of NAV, or 0.02 to 0.19 $CAD/share, until cash flow starts.
The reason I'm here is because I think there will be an offtake agreement sooner than expected, after which I hope the multiple to NAV will improve to 0.2 to 0.5, or 0.04 to 0.32 $CAD/share. My thought is based on the July news release, the upgrading of PEA to PFS, and the small, continuous insider buying with significant insider ownership.
At $0.115/share, this represents a risk/reward of -100% on the downside (it's the TSXV after all) and 278% to the upside, or about 3:1, with a timeframe of 2-5 years. The 3:1 risk/reward does not take into account the scalability of the deposit.
Finally, the technicals. It looks like a base is forming at 0.11-0.12, although that breakdown to 0.10 is discouraging.
I'm long at 0.12 and will double down at 0.08.