RE:RE:RE:RE:RE:Capital Raise for Production Plantsupersceptic wrote:
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Pone, first of all 490M is part of 1.2B present valuation at 11K/tone. If you break it down and add debt you are not double, but tripple counting. Either up value to 2B or remove 490M from calculations.
I think you are completely confused about basic financial concepts. The NPV that a resource company publishes is just an estimation of an enterprise value based on cash flows. That only establishes a potential enterprise value for the investment.
What I was doing was trying to value a stock based on a balance sheet that has debt on it. When you sell a home for $600K that has a $250K mortgage against it, the bank gets paid $250K before you get to count your profits. Your equity is $350K. The fact that you have some economic cash flow calculation (i.e., an "NPV") that says the home is worth a present value of $X does not relieve you of a responsibility to pay back debt. If you value the equity at a given time Y, you must look at the balance sheet at time Y and deduct the debt from your calculation.
1.2B is outdated calc. will likely to be between 2B and 2.5B. 1.2b ignoring 6 month of development.
But you estimated capex at $500M, which was the amount of capex associated with $1.4B NPV on an earlier estimate. You are doing a lot of hand waving and trying to pass that off as obvious fact. Why don't you build a complete model with complete facts and then defend your argument against that?
Deducting 250M (un-discounted) from 850M discounted. Completely wrong math approach. Even under outdated resources assuming 20% further Li price reduction: 10K/tonne * 5M resource = 50, 000, 000, 000 USD of revenue. Assuming 3K OPEX, 35 Billion of USD will be left in NLC pocket. That is your mone to pay off 500M debt and equity. When these 35B is discoutned the becoming 1.2B...If you won't use NPV for debt payment it is assumed that NLC will pay back 250M immediately. If 10 years term, 250M will became tiny amount, just like 35B becoming 1.2 in 20 years...
You are just confused about so many financial concepts here. You are not understanding that the starting point ($850M) was an enterprise value. You are not understanding that the valuation exercise that deducted $250M was a valuation based on a balance sheet that carried debt. You are trying to value a company that carries debt based on an implied promise in an NPV calculation to pay off the debt from future cash flows.
Try selling a home with a $250K mortgage and explain to the bankers why you don't need to pay them back the mortgage because you have a cash flow calculation in which they get paid off someday in the future.
"partner take 40% of production" - never heard of such rippoff, taking 40% for 250M debt (probably with interest). If 40% for shares, than why bother issuing shares at .76? They can do it now. The whole point for PFS is to attract multiple bids. Etiher shares so cheap or partnership giving up 40%. I.e. 40% for 250M (more likely). Basically you double or tripple count each step.
I can agree with 40% being the wrong number. So supply your own number and let's see how that changes the result.