Gaining traction looks good, page-66

Hi Guys,

There is no real application for the below calculation other than to get a sense of how much value could be attributed to the total TFC plantation, but anyway:

From presentation today, TFC bought tendered wood for A$131 kg
From TFC's latest AR we know that they estimate 19.6 kg of heartwood per tree at harvest
From TFC's latest presentation we know that there are 5.4m trees within their current plantations

Thus:

A$131 x 19.6 kg x 5.4m trees = A$13.8 Billion


Just to navel gaze a little further, it makes sense to me that TFC's strategy will be to even out plantation sizes per year to provide consistent supply across their eventual markets.

If we assume that c. 1,500 ha of harvest per year is their ultimate target and the crop rotation is c. 15 years then this means they will target a total estate of 22,500 ha as their end goal.

This would require a c. 10,000 ha of additional planting (not including recycled 2nd generation replanting), or a further 80% expansion from this point (c. 12,500 ha estate).

This would equate (in today's $) to an annual harvest value of:

A$13.8 Billion x (22,500/12,500) / 15 years = A$1.65 Billion in annual revenue from product sales.

Now ... that's a lot of Sandalwood products to sell --> you can see why they are working hard to develop new markets for their products.

The above is more for fun and not an investment thesis but does make you think

Cheers
John