RE:2019 EPS ForecastLongRoad wrote: In order to assess the impact of today's news I put together an EPS forecast for 2019 based solely on vanadium production. I wanted to understand what EFR's earnings would look like taking a conservative approach and excluding any upside from uranium sales, and potentially, section 232 benefits.
I based my analysis on Q2 2018 data as this is the most recent operating expense information we have. Further, as we do not know what gross margin may look like, I looked at what cost to produce was at Largo Resources in Q2 2018 and this was about 30% of an average selling price of $15.44/lb. However, EFR is not Largo and I assumed cost to produce at 200,000 tons was 50% of selling price and 45% at 225,000 tons. You'll probably see I am perhaps being even conservative at these levels given that selling prices are over $20.
In any case, whatever assumptions you choose to use, today's news is huge for EFR shareholders and this stock's potential leading into 2019. EFR can earn a profit without making any uranium sales. Any increase in vanadium or uranium sales will be immediately accretive to the bottom line and this will have a material impact, as company's like to say. I know I am enthusiastic about EFR but please remember that the number's below are only meant to give us an indication of what vanadium production means to shareholders. I have listed some additional assumptions for your info.
| I have excluded amortization expense as this ended in Q2 2018 | | | |
| I have excluded income taxes as EFR is in a tax loss position | | | |
| I did not include the savings from repaying the Wyoming debt | | | |
| Due to rising prices I assumed there are no inventory impairments | | | |
| | | | | |
| Vanadium produced | 200,000 | LBS | 225,000 | LBS |
| Months | 12 | | 12 | |
| Annual production | 2,400,000 | LBS | 2,700,000 | LBS |
| Vanadium price/lb | $ 20.00 | | $ 25.00 | |
| | | | | |
| Revenue | 48,000,000 | | 67,500,000 | |
| Cost to produce | (24,000,000) | @50% | (30,375,000) | @45% |
| Gross Margin | 24,000,000 | | 37,125,000 | |
| | | | | |
| Development, permitting and land holding | (3,992,000) | Q2 times 4 | (3,992,000) | |
| Standby costs | (5,544,000) | Q2 times 4 | (5,544,000) | |
| Accretion of asset retirement obligation | (1,832,000) | Q2 times 4 | (1,832,000) | |
| Selling costs | (92,000) | Q2 times 4 | (92,000) | |
| General and administration | (9,908,000) | Q2 times 4 | (9,908,000) | |
| Interest expense | (1,900,000) | Q2 times 4 | (1,900,000) | |
| Other income | 1,996,000 | Q2 times 4 | 1,996,000 | |
| Total Expenses | (21,272,000) | | (21,272,000) | |
| | | | | |
| Net Income (Loss) | 2,728,000 | | 15,853,000 | |
| Shares Outstanding | 89,000,000 | | 89,000,000 | |
| EPS US $ | $ 0.03 | | $ 0.18 | |
| Exchange Rate | 1.30 | | 1.30 | |
| EPS CAD $ | $ 0.04 | | $ 0.23 | |
Vanadium spot price went up today dramatically again to US $ 24.80, up 2.9%. How this will affect on EFR/UUUU SP and EPS, please read the post done two weeks ago by LongRoad. Exellent info, LongRoad and thank you so much!