I have done two scenarios:
Base parameters:
Royalties 3.5% DRC + 1% to partner, mining corporate rate 30%, depreciation 10% (Interest on financing the capex not included, need to be addressed), recovery rate 80%, AUD/USD 0.72, Capex: 2mtpa US$160m; 5mtpa US$400/t; 10mtpa US$800m, Dathomir meant to be responsible for power and road infrastructure fund (might be from a part of US$6b resource for infrastructure deal).
One with worse market cconditions:
using spodumene price of US$600/t, cash cost:
2mtpa: US$400/t , 5mtpa: US$360/t, 10mtpa: US$342/t
After tax NPV@10%, 60% share for AVZ for 20 years mine:
- 2mtpa: AUD$383m
- 5mtpa: AUD$992m
-10mtpa: AUD$2,153m
One with current market cconditions:
using spodumene price of US$760/t, cash cost: 2mtpa: US$355/t , 5mtpa: US$319.5/t, 10mtpa: US$303.5/t
After tax NPV@10%, 60% share for AVZ for 20 years mine:
- 2mtpa: AUD$808m
- 5mtpa: AUD$1,895m
-10mtpa: AUD$3,940m
In a worse scenario, at spodumene price of USD$600/t and cash cost of US$400/t, AVZ still would have AUD$383m after tax NPV. (best cash cost US$297 per the latest ASX announcement).
I don't think Manono project would have economic viability issues.
All imo & DYOR.
