RE:RE:RE:$65 a shareIf the final buyer of this deposit is a car company they may only want to build a plant that suits their needs. This might give them a competitive advantage going forward. The most important factor, I believe, is the low ongoing operational cost and life of mine. Both of which CYP has in spades. I believe NPV is a bad measure for 30+ year deposits let alone 100+ year deposits. The real value here is we have a low cost 100+ year deposit in a great mining district.
yakattack wrote: At what point the scaling stops and NPV ends I'm not too certain, but I do know that it has been mentioned that it can be scaled in linear fashion up or down.
The biggest difference would be CAPEX and how much larger the plant needs to be to accomodate "x" amount more of material being put through it. A modular approach here would be suited to scale as need be with minimal extra cost.
But NPV would certainly be added because after that point all you have is operating expenditure and you know what the cost per tonne is at that point. From there it's just margin on the feed going through versus what it costs to put it through.
So if you put 10 through over 10 years, or 30 through over 30 years.... the 30 is going to give you a larger value.
A big company would probably just scale it up 3x though and do say.... 80-100K tonnes instead of 30K. Get it through faster and in a big go versus prolonging it.
It's a good point for discussion though. Water usage for more production and how much more of a plant would be needed are two I can think of.
macaw wrote: Firstly, I think everyone belives that CYP is undervalued here. But at the proposed production in the PFS the extra reserves will only add life to the reserves but not much NPV. The only way to extract more NPV is to increase the daily throughput. This will require more water, bigger plant etc. These things typically don't scale forever. So you will be left with a smaller NPV than you are extrapolating. The question is how large could a plant be? At that size CYP will probably have more than 40 yrs reserves.
yakattack wrote: Do I have your attention? Good. Now read.
CYP's NPV(8%) using the current $13k/tonne pricing is equal to US $1.88 billion, or C$2.35 billion
Given the same valuation model as Piedmont is trading (ON THE MARKET!), currently trading at 127.4% of their NPV(8%).. CYP should have a market cap of
C$2.99 billion.. or roughly C$20/share ....
That's accounting for 1/4th of the project with the past (lesser) extraction tech using sulphuric acid, numbers will be even better with hydrochloric acid.
MASSIVE
Now here's some food for thought..... if the market values Piedmont at over 1 BILLION for their project, which is less than 1/10th the size of CYP.... if you were to simply compare project size to market value.... that would mean that CYP is worth over 10 BILLION.... or north of $65 a share (if the entire project was to be utilized).
This does not account for REEs either - just existing valuations...
Will it get to $65 a share? No.
Should it get to $8-$10 a share, to be followed by a proper premium of 80-100% for $15-$20+ a share? It's possible - and it should be done.
Any NDA knows very damn well what the numbers would be post-pilot. Makes no sense to drag this on and on.
I cannot see CYP being purchased for $7-$8 a share... because that would only be equal to existing peer averages. You don't get a buyout offer that is the average of existing market caps for your competition.
This means $10+ a share - and it better be before August.