@apkjm ......" I was wondering what your thoughts are to the question @TheGladiatorask you, I may of missed your buddy so apologies if so !"
There was no question in there, just a statement.
For some reason people seem to assume that it is my numbers, yet all I'm doing is quoting numbers provided by WFE and the Independent Expert.
Does anyone really think the company would have worked out some hypothetical number based on 1kg of cobalt produced as per
@TheGladiator suggestion?? I certainly don't!!
IMHO the company would have worked out their numbers and checked them before handing them to Mr Connelly.
The Independent Valuation of Processing Facility Report has some long awaited information in it, but somehow there are many shareholders that don't want to believe the numbers........
For example
@Mutley8 yesterday was trying to still call the plant a 250,000t/a plant in this post
https://hotcopper.com.au/posts/37823893/single....yet Mr Connelly, with numbers provided to him by the company, states on p2 of his report,
"The project is based on processing 25 tph of copper cobalt ore."
On P16 he clearly states that the plant is a 175,000t/a plant producing Cobalt Hydroxide and Copper Hydroxide.
Perhaps it was a 250,000t/a plant for just Copper Hydroxide, but now producing 2 products has reduced the capacity, I don't know, but I assume the Independent Expert DOES know.
What number can WFE include in the prospectus?? It is obviously the numbers signed off by the Independent Expert, 175,000t/a.
What NPV can the company use in the prospectus?? Their own numbers show $US108M for the entire plant, not WFE's 50%, do people think an Independent Expert's numbers will be higher or lower??
There seems to be a lot of disbelief in these threads about WFE's own cash flow model coming up with a NPV that will be below the Mcap of the company (at 2.4c/sh). Why don't people want to believe the latest info from the company and the Independent Expert??
IMHO it is people sticking to their belief, instead of the reality of the situation.
Will the operation be profitable? Ans YES, according to the cash flow model.
That is not the issue, nor the problem IMHO!!
The problem is the fully diluted Mcap compared to the NPV!
The share price was driven upwards from a Mcap of under $10M in Nov/Dec up to nearly $60M on hype about a hugely profitable cobalt operation coming together. It was driven by a rising Cobalt price that went to $US90,000/t. IMHO if the shares had been trading for the last 9 months, the price would have fallen, just like every other Cobalt hopeful, because it is obvious that a cobalt price of $US30,000/t is a LOT less profitable that when the price was $US90,000/t. The price of Cobalt has crashed, and those that don't think it has are in denial.
When you add all the shares needed from the prospectus (416.66M shares with a raise of $10M at 2.4c/sh), plus the 300M to the JV partner, the Mcap (at 2.4c/sh) goes up to well over $80m.
I used the example of New Century Zinc, comparing the NPV to market Cap, because it is similar, in that they have an existing plant, plus a resource AND an offtake agreement/sales. They are producing product and have upside potential in their exploration leases, all VERY similar to WFE, though a different commodity (I don't own nor particularly like NCZ, it is for comparison purposes only!)
NCZ's Mcap is only 33% of the NPV of the project.............
Why should WFE's Mcap be any higher than 33% of NPV of the project???
