Capex of USD 83 million is clearly set out in the presentation. I'm not sure why you couldn't find it.
NPV (which takes into account revenue, capex, and opex) ranges from USD61 million all the way up to USD151 million depending on resource pricing, etc.... used....so say $1.25 to something like $3 per share.
Also, the NPV excludes the huge potential upside from exploration - management talk of a 20 year production life rather than the short life used in the NPV calcs.
The way I look at it, the big risk here is Indonesian political risk, and throw in a bit of terrorism risk to boot. Seems to me the question is whether this risk offsets the high NPV per share one could reasonably expect to eventuate - if there are no problems or the problems can be managed.
Like any other project, the banks will decide whether this goes ahead. Macquarie Bank has taken up shares recently (80 cents per share), and provided additional feasibility study funding. Last time I checked Macquarie wasn't in the habit of throwing money away....so I think the odds of bank finance must be reasonable.
To me this company is like an AVL and HIG, where shareholders can make a very large profit, if they are willing to stomach the risk of a substantial loss....and the risk with HER is nothing like the risk that was attached to AVL a couple of years ago.
Regardless, I only ever hold a carefully managed position (size and portfolio allocation wise) in a company like AVL, HIG or HER.
I hope this adds to an interesting thread...not meant as a criticism of any earlier posts.
Cheers
Rosco
HER Price at posting:
0.0¢ Sentiment: None Disclosure: Held
