RE:RE:RE:RE:High conviction 10 bagger: imminent commercial 1st plantI’m glad you are referring to the company’s presentation. The CEO has said several times there would be a need for 400 of their 40 tons plant (200 at 2 shifts) to divert all the shingles being dumped in landfills yearly. But he also said the economics may not be the same in all jurisdictions as the attractiveness of a location is based on 2 things: level of tipping fee and liquid asphalt price. It is worth finding out how many plants could be built in with the same attractive metrics as Calgary ie 20M$ cost and 10M$ EBITDA (at 2 shifts per day).
Now I don't know about asphalt pricing by region but we have infos about tipping fees which I think accounts for 2/3rd of profitability anyway. So according to their presentation, it would look like they could have 10 plants in Canada: 6 locations with tipping fees over CGY + Halifax similar on top of probably 3 plants in GTA. For the US, if you look at more granular tipping fees by state, there is 65M population where states have a tipping fee near or over Calgary’s level. That is roughly 2X the Canadian population ex-Quebec (41M-9M=32M) covered by the Canadian plan. Potential seems like an additional 20 plants in the US.
Bottom line, you have probably a pool of 30 potential plants with highly profitable financial metrics (plant cost = 2X EBITDA) that could yield 300M$ EBITDA with plenty of other less profitable locations but still plenty attractive for licensing. So yeah the Calgary commissioning in 1H 2025 will be crucial as it will unlock all this potential. Also the fact that theoretically, plants built at a cost of 2X EBITDA could be done entirely with debt at some point would certainly be attractive to PE firms.
