Hi Mongrel,With respect to your comments on CAP, you may or may...

Hi Mongrel,

With respect to your comments on CAP, you may or may not be right, time will tell.

With respect to the NPV, I'll add some numbers.

I've assumed annual profit of $328 (8.2 mtpa at a margin of $40 as calculated as per previous post).

Present value of $328M for 20 years deferred to two years at a discount of 10% is $2,538M (I acknowledge I fixed a calculation error from my previous post which said just over $2B, but I did say it was a rough calc)

Deduct present value of future revenue from CAPEX of $2.3B and there is a positive NPV of approx $200M.
Whilst NPV is positive based on above, it does not seem significant relative to the amount required to invest.

My first NPV was very rough and the above is just a quick review of a rough NPV. If you do your own calc and wish to post, please do so. Otherwise, please accept the above as a rough calc. I am happy to stand corrected if I have overlooked anything this time.

I'm not saying Razorback is dead - its just not as favourable as I had initially hoped it would be. ROY say they will try and optimise and they have the cash to do so. I hope they can make some significant improvements. I planned to continue to hold my options as I have for some time (although they are worth a lot less than I paid).

The purpose of my post was not to down ramp ROY with CAP comparison so please don't be defensive. I had posted on the ROY thread previously with my expectations of the ROY PFS using CAP as a comparison which had been appreciated by some on Hot Copper. Whilst I still prefer CAP over ROY I accept CAP has its own hurdles the biggest of which is the delays in completing the liquidation of CAP's JV partner so CAP can go out and get a new JV partner.

I am bullish on the Braemar iron formation overall, of which CAP and ROY are the most advanced. I also hope that they continue with the Braemar Alliance announced a year or two ago which could assist is sharing the cost and benefits of large CAPEX costs of things like slurry pipe lines and port options. Time will tell but I hope that the Braemar will become the new Pilbara! (but with better margins)