Thanks for the clarification and agree. I used 35% but can see the rate for mining is actually 30% (and 35% for everything else there). In terms of royalty, I was using 10% as the just in case from previous thoughts and before the exclusion, so yes agree overall 4.5% is the number (and slightly lower than the spodumene royalty rate of 5% for Pilbara operations).
My purpose in my posts has been to duplicate the SS modelling approach. If we go back to the released SS they do not include royalties (and obviously company tax) in their pre tax NPV calculations of over US$1.6 billion in the SS (footnote 7 on page 6 of their study - Post #: 36050143). (I call it Pre tax and before royalty cash flow ( EBITDA) in the table below which is what is used to get to their comment of pre tax IRR of over 90% and pre tax NPV of US$1.6 billion). So the pre tax stuff in my posts remains unchanged but taking these two points their underlying IRR (post tax) as estimated by me using the SS (as it was not published in the SS) increases from my initial 57% to 65% in post tax NPV for the adjustments using a 10% discount rate, which makes the post tax results look better as well).
Pre tax IRR remains at just over 90% in my earlier post (unchanged). Essentially, if company tax/royalty holidays are provided etc would expect the project post tax NPV to get closer to the pre tax IRR etc
Obviously all IMO, but the fact royalties/other taxes (the taxes before company tax) were not included in the SS for the pre tax NPV numbers suggests they are confident of getting some form of tax concessions, and not just limited to company tax etc etc. Will be interesting what the DFS says in that regard.
IMO
AVZ Price at posting:
4.1¢ Sentiment: None Disclosure: Held
