No need of further dilutionFor RP2.0, TV requires $93M. Construction to start in Q1 2022. So we can safely assume that whatever extra cash TV generates in 2021 and in 2022 H1 can go towards $93M required for the project.
I have used the information released by TV through its corporate presentation, press releases, financials and MDAs in arriving at the following analysis. The only assumption I have made is that TV enters into forward swap for balance of 2021 production (which is not yet forward swapped) and 2022 H1 production. I have done this because this is the worst case scenario. Actually I beleive that TV should not enter into any further forward swaps since I expect Zinc prices to go up in 2021 and 2022. Based on this worst case scenario, TV can spare/put aside $68.31M cash in 2021 and $34.87M cash in 2022 H1 for RP2.0. This comes to a total of $103.19M.
Of course, whether TV will actaully meet its 2021 projections or not is a different story. Also, what the management will actually do in terms of dilution or no further dilution is also a seperate story.
| Forward Swaps | Months | Qty/Mth | Total Qty | Price | Value |
| | | (Mlbs) | (Mlbs) | ($/lb) | ($) |
| Jan - Mar 2021 | 3 | 3.750 | 11.25 | 1.10 | 12.38 |
| Jan - Mar 2021 | 3 | 2.500 | 7.50 | 1.12 | 8.40 |
| Apr - Dec 2021 | 9 | | 59.50 | 1.23 | 73.19 |
| Apr - Dec 2021 | 9 | | 49.29 | 1.25 | 61.61 |
| Total | | | 127.54 | | 155.57 |
| Average Price | | | | | 1.22 |
| | | | | | |
| 2021 Zinc Production Guidance - Midpoint | | | 345.00 | | |
| Balance Left after Forward Swap | | | 217.46 | | |
| Assuming TV sells balance at today's price | | | 217.46 | 1.29 | 280.53 |
| Total for the year | | | 345.00 | | 436.10 |
| Average Price for the year | | | | | 1.26 |
| | | | | | |
| Projected Annual Margin above AISC of 0.90 | | | | 1.25 | 117.00 |
| | | | | | |
| Projected Annual Margin above AISC of 0.90 | | | | 1.26 | 118.31 |
| | | | | | |
| Sustaining capital expenditure | | | | | 39.00 |
| Exploration capital expenditure | | | | | 6.00 |
| Expansionary capital expenditure | | | | | 5.00 |
| Total expenditure out of Annual Margin | | | | | 50.00 |
| | | | | | |
| Cash that can be spared for RP2.0 in 2021 | | | | | 68.31 |
| | | | | | |
| 2022 Zinc Production Guidance - Assumption | | | 345.00 | | |
| 2022 - H1 Production | | | 172.50 | | |
| If TV sells 2022 H1 Production at today's price | | | 172.50 | 1.29 | 222.53 |
| | | | | | |
| Projected 2022 H1 Margin above AISC of 0.90 | | | | 1.25 | 58.50 |
| | | | | | |
| Projected 2022 H1 Margin above AISC of 0.90 | | | | 1.29 | 60.37 |
| | | | | | |
| Sustaining capital expenditure | | | | | 19.50 |
| Exploration capital expenditure | | | | | 6.00 |
| Total expenditure out of Annual Margin | | | | | 25.50 |
| | | | | | |
| Cash that can be spared for RP2.0 in 2022 H1 | | | | | 34.87 |
| | | | | | |
| Total Cash that can be spared for RP2.0 upto 2022 H1 | | | | 103.19 |