Hi Max, great research... enough to get me concerned about the BOOT stuff anyway
Just found this in the 20/11/2017 DFS update announcement (summary of the DFS results)... it show's all of those plants as falling under a BOOT arrangement with the annual repayments being included in the annual opex of the DFS.
Does anyone understand these BOOT arrangements well? I used to get the impression we'd need to find someone to finance and operate these BOOT plants, but now I'm thinking that we just go to the supplier and they essentially do all of that as their core business.
My interpretation of the SMS undertaking "full" FEED process now is just that it includes the mine site and plant that wasn't previously being looked at by SMS (previously only the TIVAN refinery), not all of the BOOT processes as well - I believe these are still 'off-the-shelf' products that suppliers will fully build/own/operate and we just pay them back with a premium... a form of finance I guess. They are proven/established plants/processes and even if SMS could refine them, I cannot imagine that they would ever be able to realise so many new efficiencies that it would be worth us having to take on the additional capital risk required to build them ourselves etc (due to them no longer being an established turn-key solution).
I'm personally not expecting any major variations from the 2017 DFS economics, and feel there's been a major miscommunication to the market (bordering on negligent) if there is a major variation to the 2017 DFS. Although a $50m change in capex wouldn't necessarily surprise me, but I'd expect to see a corresponding inverse change elsewhere in opex/NPV too...
