Insider1267, interesting point... Insider1267,
I thought the exact same thing as you! .... however, I've never heard anything remotely definitive on Investment Quebec..... Are shares moving higher on your observation? You said, "...letter of intents in place, what we’re having with HELM and with Investment Quebec..." that's new to me.... anyone heard about it? did the good doctor let it slip out by mistake !! ;) Insider1267, what do you think of my earlier post, repeated here with a few changes, In CRE's eagerly anticipated Feasibility Study, I see multiple ways in which the pre-tax NPV(8%) could soar.
1) LC prices, from a US$6k/mt price in PEA to probably US$ 10k/mt in FS. This alone would take the pre-tax NPV(8%) from C$488 million to C$1.444 billion [data point taken directly from CRE's PEA]. NOTE: Lower tantalum prices since the date of the PEA will lower the NPV, I'm guessing by about C$100 M.
2) Longer mine life? 17 years in PEA, but more resources have been found since then.... might the mine life grow by 50% to 25.5 years??? Or, with more resource,perhaps more production per year and extend mine life to 20 years?? Nemaska's project has a 27-yr mine life.
3) Reset of FX rate assumption. The PEA carries it at parity, US$1.00 to C$1.00. It will be reset to something like US$0.80 to C$1.00, which I believe could add a few hundred million C$ dollars to the NPV.
4) Optimization of key cost components. Going from PEA to FS frequently allows for positive changes to costing and logistics as the margin of safety in the PEA is fine tuned. This is not a sure thing, just my guess.
Net, net, we could be looking at the pre-tax NPV(8%) of $488 M tripling... which would have CRE shares trading at a P/NAV of less than 15% despite it having a project that could reach initial production in 2h 2019.....
Rough Valuation Exercise
160 million fd shares + 80 mm new shares to get into Phase 1 production, (that assumes that HELM contributes 25% of the project equity component) plus 10 million misc shares = 250 M fd shares when it's all said and done. 250 M shares at $1.00/shr = $250 million EV, which would still be trading at under 20% P/NAV. ALL above calculations are my own.
Importantly, I'm not saying that CRE's NPV possibly tripling will leap frog the share price to $3 bucks, some of the share price movement of late is in anticipation of the FS. All Li project PEAs from before 2016 will have show significant increases in NPV driven by Li pricing. However, I don't think many, if any, NPVs will triple. For example, I estimate that marking up Nemaska's pre-tax NPV(8%) (for pricing only) would grow it from C$1.9 B to C$3.3 B, a BIG move, but not a triple, not even a double.