independent valuation of luapula plant, page-56

Seriously?

A brand new plant with completely new equipment would be worth US$85m according to the report but the NPV of spending US$10m to get the old one going + 1kg of cobalt production is US$108m. What a ridiculous statement.

NPV is a full cashflow model for 80% plant run rate at cashflows based on inputs provided by WFE. Yet holders seem to think it isn't a fair reflection. Maybe they should talk to management and ask why they gave the valuator those numbers lol.

Anyways the risk report highlights the 3 key areas that need to be worried about before reaching NPV valuations.

1. Budget for rehab was assessed as a high risk as no contingency allowed for. Plants are rarely built on time and on budget.
2. Report highlights commissioning risk in terms of costs and timelines as medium with a high impact on valuation if it eventuates.
3. Report highlights opex costs as a medium risk with high impacts on cashflow. High opex costs early on are likely, this in itself isn't a big issue but it becomes a CR risk.

Anyway - none of the valuations have a 50% basis that is higher than WFE's current MC.

Looking at the spider web if you increase cobalt grade 30% and cobalt price 30% you get to an NPV of c. US$220m or A$310m.

That would give WFE a valuation of $155m. But they have $25m of funds to raise to get to that point so that leaves about 100% upside in it. And those assumptions require a lot of things to go right.