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Orbite Aluminae Inc T.ORT

Sector: Metals & Mining | Sub-Sector: Aluminum

Orbite Aluminae Inc is an exploration and development stage corporation involved in the extraction of different ores, namely alumina, using environmentally friendly extraction processes.
Price: $0.27 | Change: $-0.005 | % Change: -1.82%
Volume: 561,849 | Day High/Low: 0.28/0.27 | 52 Week High/Low: 1.14/0.19
Orbite Aluminae Inc > HPA Plant Value
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HPA Plant Value

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2.5 stars
June 22, 2013 03:57 pm

One issue that I started to consider is that even if financing is found and the HPA plant starts to produce a year later at 3 tpd, it may not be that proifitable. The total projected cost of the plant for a 3 tpd capacity is now estimated at $105 millions. What it would take to bring it to 5 tpd is unknown and will be studied starting in late 2013, so I will not even consider it for the time being.

The capex has to be recouped over its useful life. I assume that the useful life of the expanded/modified plant will not be longer than that of the original design that was costing much less. This means than the overall cost per ton in terms of Capex over the life of the plant will be much higher than orginallty planned. So, even if operational costs do not increase, the overall cost per ton over the life of the plant will, reducing any potential profit. If on top of that HPA prices remain depressed, will the HPA plant be profitable at all?

Basically,Orbite should do a full fledge feasibiliy study before comitting any money they might get on th expansion/modification of the HPA plant. From what I read, they have had independent opinions reviews on engineering and costs, but I saw nohing on profitability/NPV.

If they were to do a FS and concude that the project will not be profitable, they should just scrap it. It would be the best economic decision. If a FS cncluded that the project is prfitable, of course they should d it.

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RE: HPA Plant Value

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3.5 stars
June 22, 2013 04:13 pm

Mgrenier, I cannot put my hand on he numbers right now, but if I recall; even with an increase in capex of 60% a decrease in HPA price of 50% if we assume as expected low OPEX I think HPA operation remains extremely interesting, I'll dig that further...

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June 22, 2013 04:25 pm

and they're moving forward,,,,,,,sooooo maybe you should call 'em and enlighten them on these Econ 101 things. amazing how little faith people are putting into resumes of guys who specialize in things when they get to this level. The AGM said there was over 30 plants built between this new BOD crew. How many plants do us hundred + on this and SI brd have between us ???..........( insert crickets here )>
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June 22, 2013 04:34 pm

The first plant always costs the most.  The second HPA plant could approach half the cost.

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RE: RE: HPA Plant Value

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June 22, 2013 04:41 pm

my69z,

I am not saying that the BOD has not thought of that nor am I saying that the plant will not be profitable. However, given the company's past record and given that Richard Boudreault is still CEO, I am far from certain than the BOD can exert control over him and prevent rash decisions. At least on paper, The COO (Glenn Kelly)reports to the CEO (Richard Boudreault). Mr. Boudreault has been less visible lately but he was not transferred to a less influential position within Orbite. As long as he is CEO, I cannot blindly trust that important decisions are made by the people on the BOD who are trustworthy.

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RE: RE: HPA Plant Value

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June 22, 2013 04:44 pm

Rockton I was about to say the same thing... What is the price of corporate knowledge ? if ort succeed this capex increase will be viewed as the price of corporate know-how and experience gathered through hard learn lessons... But for that we need to achieve sga1 hpa1 rmr1...and to achieve these we need to get through the current difficult time.

 

For sure HPA2 will cost much much less... But we need to get there...

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June 22, 2013 04:46 pm

Rockton I was about to say the same thing... What is the price of corporate knowledge ? if ort succeed this capex increase will be viewed as the price of corporate know-how and experience gathered through hard learn lessons... But for that we need to achieve sga1 hpa1 rmr1...and to achieve these we need to get through the current difficult time.

 

For sure HPA2 will cost much much less... But we need to get there...

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June 22, 2013 04:55 pm

Come on mrGrenier,

 

Kelly said in the face of RB before the whole audience that now a different skill set was required, that previous timeline were unrealistic, this is no way a "yes man". RB is no way in charge of operation anymore.

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June 22, 2013 05:01 pm

MoneyCristo,

I listened to the webcast and heard Mr. Kelly say that. Still, Mr. Boudreault has enough power to retain his official position as CEO at over $500k per year. As soon as he steps down from his position as CEO, I will be convinced that Mr. Kelly and the BOD are fully in control for good. 

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June 22, 2013 05:07 pm

MG, thats absolutely fair too about RB. My gut based on that quietness and the AGM, he's out after this next funding. I think so hecause they will let that have his name on it, even though it won't be a ig one. After that they will take over everything because in all reality, that's not what he specializes in. He's not a builder or funder like this BOD. Imo, his parting gift was his name on the Glencore contract as CEO. Delays aside, i was glad to see that for him. But as this gets months behind it, i think RB will have done his technical job and really had no intentions to hurt the pps. At minimum, the new BOD even said in the AGM..,were shareholders too. Iam very excited @ still appreciative of the 12 +yrs RB and that crew did. Heck, dont forget even Decary gave them high praise. But agree with you and it looks to me, the news guys see it too. I say before end of summer.....new CEO and one with excellent credintials. :)>
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June 22, 2013 05:14 pm

MoneyCristo,

I am very long on Orbite. When I bought in 2011 I was considering keeping my shares for six or seven years, perhaps more if I still saw great growth potential after that. In order for me to remain long, I have to be able to trust that the BOD and management can bring Orbite to success. I have also to trust that the BOD and management can take us out of the perilous situation that Mr. Boudreault put us in. My trust is diminished as long as Mr. Boudreault remains CEO

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June 22, 2013 05:16 pm

My69z,

I do hope so

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June 22, 2013 05:30 pm

Which "technical job" did Richard Boudreault do so far?

What they have demonstrated at Cap Chat is a lame joke compared to what they promised.
The US Bureau of mines has demonstrated and documented much more a couple of decades ago.

Wake up, investors!

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June 22, 2013 05:34 pm

You obviously have no experience at all. Among all the people on this board you are by far the least intelligent. Sorry for that. But somebody had to tell you, rockton.

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June 22, 2013 05:34 pm

Asterixx, Your comment is lame attmept at shorting the stock. Give it up! We are not dumb!

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June 22, 2013 05:38 pm

What exactly is wrong with my comment?
Did you read the USBM papers?
Did you compare them with what Orbite wants to accomplish?

Nothing new under the sun.

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June 22, 2013 05:39 pm

Please post a pic of the BLM's alum ignot. I've obviously missed it. >
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June 22, 2013 05:42 pm

Money Cristo,

One last point about my diminished trust. It is only at the AGM, two days ago, that we finally learned that "less than one ton per day" meant 50Kg or 5% of one ton.

 

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June 22, 2013 05:44 pm

There's no doubt in the fact that one could produce an aluminum ingot from USBM-route alumina. However it does not appear to be very feasible to do it.

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June 22, 2013 05:45 pm

I do not understand, why they do not sack the "less than one ton per day" gang....

This is ridiculous.

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June 22, 2013 06:38 pm

so that's why there's an ORT plant with the worlds largest commodities trader waiting and not a plant based on the USBM.

 

Thanks

 

( lmao)

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June 23, 2013 02:40 am

Name dropping will not save you.

(Well maybe it may indeed save you, my69c, as you seem to get paid for trolling this board. But it will not save Orbite.)

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