Here is finally my first estimate of the SGA NPV (Net Present Value of one Smelter Grade Alumina Plant), including the high-purity silica values and the 20% reduction Opex.
- Used case: Sensitivity Analysis, Scenario 2, Table 1-10 of PEA, p. 26 duplicated to verify formula and values; error ranging between 0 to 2%, so reliable data.
- Based on 1,228,628 ton of silica processed per year.
- 220 M shares
- NPV based on 25 years
- Conservative production split considered: 95% of the silica production is at 95-99% purity level
- High-purity silica price has been reduced for 99% to 7N purity levels (compared to the HP-silica price I have used for HPA Plant estimate) to account for possible volume effect (not considering expanding demand in LED sector, solar grade or semi-conductors, for example). See price reduction factor in point 2, 2nd table (last column) for more information.
- HPA Plant could target even higher silica purity levels when SGA Plant enter into production, which would largely compensate for price reduction of lower purity levels produced by the SGA Plants.
- SGA, Hematite, REE/RM, mixed oxides: using same data as for PEA.
- Opex column added to include a 20% reduction for 2nd and 3rd tables.
- Expected Capex to be reduced by 15% (from announced 60% reduction of water savings- less pumps, tanks, process equipment & civil work), from 500.4 to 425 M, but adding 100M for high-purity silica processing/handling/packaging. Resulting Capex: 525 M.
- Premium for fine/extra-fine silica particles: not considered.
- 3rd table is presenting NPV with splitting the revenues from smelter grade alumina only; Orbite with 50% of the smelter grade alumina revenues, the other 50% to JV partners.
2- Tables for high-purity silica price & production estimate
2nd table value ($ 568 /ton or $ 0.57 /kg) is used for the NPV calculation and reduced up to $ 260 /ton (54% reduction) for the Sensitivity Analysis (see point 3).
3- NPV with HP-silica, 20% Opex reduction
So, SGA1 NPV per share = $ 15 to $ 66 at 10% discount rate, and splitting smelter grade alumina revenues @ 50% (JV @ 50%), 220 M shares. This is for each SGA Plant. Actually, Orbite might not need any JV for the next SGA Plants (100% owned by Orbite) after the first one and then, the additional SGA Plants would have an NPV per share = $17 to $72 each (for SGA2 and up). This is approx. 2 times greater than original values in PEA. We can expect something in that order of magnitude.
Orbite is planning to build 10 SGA Plants, so a phenomenal growth is expected for the next decade. Not only Orbite will bring smelter grade alumina at lower costs and without Red Mud, but will also open new possibilities in silica/silicon technologies. Also not to forget: SGA1 will produce rare earths(LREE/HREE/RM) in a clean way and at very low costs, large volumes, with scandium at close to 8 times current yearly worldwide production level. Orbite is definitely about to become the leader in all of its business segments.
HPA1 is about to rev. Chemicals being delivered.
Huge Red Mud & Fly Ash business, huge resource increase expected.
Wake up Mr Market, you've been put to sleep by the Short Interests.
HPA Plant - HPA1 ($ 9.52 2013, $15.05 2014)
People seems to be overconservative here. My approach i