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21% NdPr ×$76=$16
Contains 92% of the basket
$16÷92%=$17.34/kg for 100% of the basket
Some previously said concentrate would be 33%
Where is the DFS on the pensana Web site?
I think you are fairly close to the mark Mumbles, Using yesterdays prices I get a Basket Price of US$24,750 for a 90% concentrate
But as I said in an earlier post, I prefer to look at the In-situ value of the ore when comparing deposits ie Longonjo dirt is currently worth US$550/t which at a 81% recovery would yield $450/t-mined.
They are not claiming $44,000 for the basket price on the index date (30th March 2021). That is the calculated value by The business plan from the revenue and production. appears to be calculated over 10 years, to arrive at the NPV. The numbers stated, being the average between the present and the end of the period. $44,000 is the average basket over the period.
if you take the base price basket at $27,000 and allow for a CAGR of 8%, by year 5, you arrive at a basket of $44,000, by year 10, $91,000. At todays price, that base price would be approximately $22,000. Obviously a lot of the above is speculation. and i wish there was a little more detail
Are they claiming $44/kg for the basket price, that doesn't make sense.
Based on 20% ndpr at $76 it cannot be over $20. And that's at today's price.
DP, the numbers aren't given but the calculation is indexed on Shanghai Metals for 31st March 2021, was current when the BP was published
You hit a sore point after a pretty rough ride on another forum by a moron. I've just had an overnight for a small procedure hence would have dug it out sooner. It's in the archives on the Pensana website. There's a very compressive set of data in there. I intend to do the same.
Ask a direct question, get told to shut up.
That's not a good attitude to encourage investors.
Give it up Dumbo, you have already exposed yourself as a Down-ramper, so nothing you can say from here on will have any credibility. As to RBW, good luck I think they will need it.
Usually it's $ per kg at a specific. date.
Where is the DFS? I can't find it on PRE website
Re baskets prices. The average price in the BP for 125KT over 5 years, is $44,000/MT. Whether that is exactly represent or not I haven’t worked out independently or (rest assured i will be doing), but it definitely isn’t the price of NdPR. The difference is I have confidence not only in BOD, but also in the LSE who vet any RNS before allowing publications. Fundamentals such as NPV need to be justified.
>>seems that we are being trolled by a well know contributor to Hot Copper, either that or Dumbpunter
I only came here after Tornadotony start posting the psuedo-accountancy crap in the RBW forum and found here was doing it here too. So fair game , defend your investment decisions.
Your motives are now obvious. Others disagree
Last time i ran my numbers I used NdO2 @ US$87/kg
Now everybody realizes that the Chinese Government is currently manipulating the prices to discourage the West from developing Process capacity. That is what you do if you want to preserve a Monopoly, and that is also why the further up the supply chain Pensana can get the better the Margins. Magnets prices are still above $40/kg and yet contain only about 300gms of NdPr !
Give me a link to setthehive I'd like to read what he says.
Obviously you have missed the crucial difference between REE and other minerals.
The ratio between valuable and not valuable REE determines profitability far more than the cost of extraction.
Read the report i linked to.
Look at a similar basket mine and see how metal pricesaffects profitability.
I suspect the Angolan mine will never be profitable, but would need more study.
Having an end to end production would make all the difference but PRE doesn't have either that or the money to build it. It has a potentially unviable mine, a lot of bull**** and a high share price.
Not me, China. As stated previously, I'm an independent actor in all respects.
"Charley, I appreciate that you have a lot of faith in your own numbers, sadly I an many others have differing results "
Putting aside any funding or executional risk, the only real debate is around price, all other aspects (capex, opex, volume) are broadly provided by the company.
That leaves us with three main scenarios (excluding interest, tax and any ramp-up period):
- Current price ($68), NPV = nil
- Adamas 2030 price ($100), NPV = $1bn
- Estimated business plan price ($140), NPV = $2.3bn
What price level are you assuming in your assessment, China?
It seems that we are being trolled by a well know contributor to Hot Copper, either that or Dumbpunter and Charles_H are copying argument put forward by Setfire2thehive, The spread sheets miscalculations and Basket Price drivel are his constant trade marks ! while pumping an Ionic Clay deposit in Uganda. Which IMO has little hope of ever making a profit, especially if operated at full ESG Compliance . Last time I looked they had a stated mining cost of around US$12.60/t and Revenues in the $10-12/t range ! and that is before performing any EIS to determine actual Rehabilitation costs !
While some people like to calculate a Basket Price by determining the value of 900kg of TREO concentrate, I prefer to calculate the recovered Value from one In-situ ton of Ore, which for Longonjo (the mine) is somewhere between US250-500/t depending on partial (81%) recoveries and if it is weathered or fresh Ore.
How do you work that out. If you are an RE miner only, then i agree with you. But if you are selling the final product, the price achieved and revenue is derived from volume and of the finished product.
The NPV is priced the margin from the final selling price. As Pensana is a full supply chain, the the NPV is based on the margin secured from the final selling price at Saltend not Angola minus the production costs in Angola
The CAPEX and the OPEX is all in the BP, the final selling price is currently based on SMM exchange prices. The fiscal terms for Angola are in the mining license. These royalties and taxes are based on the Angola prices, which may or may not be 20% of the final selling. Which was a very good reason for the Angolan Soverieign wealth funding investing heavily. As they can participate In the margins from mine to end product
The basket price is based on the combination of all the (dozen) REE on average per kg .
This is 100% of the value. And doesn't change.
At mining you may get 20% of this.
By the time you get pure metal you get 100%
As you go through the (7?) processes you get a progressively higher percetage of the final value.
If you want to calculate the NPV you have use the value at output of the mine not the final metal price, I.e. 20% of the basket price.
Given that PRE was about to realse a BFS six months ago can anyone tell me what the basket price is at the Angola resource?
Would have had estimates in the DFS, where is it?
Don't hold your breath, and certainly not if that 20% remainder is La Ce !
Neither Burundi or South Africa will be radioactive.
Only Burundi will need final processing at Saltend to extract the remaining 20% of value out of it, as it will be processed first in SA.
You completely misunderstand the process in Burundi, they are mechanically extracting all the ore as its 80% REE. And the process they can use allows 80% of the final metal price to be obtained using a $50 m investment in SA.
I strongly recommended you read this study on calculating the profitability of mining REE outside China
Also read the RBW articles to gain an insight how basket price, concentrate price and going down the value chain affects income/profitability.
A key aspect is that the concentrate extracted from the mine is valued at 20% or less of the basket metal price and that lower level of critical REE, has a nonlinear effect on its value.
So if you want to value a resource you have to clear lyidentify the exact basket value, which is often the percent of ndpr, the criticsal REE, to the low value REES. And then take 20% of this as the value in the resource.
Don't forget to take into account the reduced value due to radioactivity, which is a big unknown.
Using RBW's Gakara as an example is fraught with danger, it is a one off, the ore is/was hand picked, that means there is a huge amount of waste between the Ore veins, mechanizing will then mean that everything mined will have to be processed, what effect will that have on the financials ? Pensana will probably take concentrate from SA so long as it is clean of U & Th, from what I am hearing that will go for anybody else's product.
The greatest expense is extracting the REE and it costs just as much to process the low value parts as does the valuable ndpr. 93% of value from 30% of the material processed in the case of RBW. They seem to concentrate up to 80% from Burundi, but settled on a lower figure using bigger diggers. The seams are 80% pure REE.
There is a lot of explanation of the processing, basket prices and effect of moving up the value chain (to
80% in both mine and gypsum stack).
The issue of radiation and toxic waste product is another headache and as you must be aware a plant was shut down recently Malaysia. I'll take talk of magic solutions with a pinch of salt. It adds to costs.
I think Saltend was mentioned by RBW as a possible processor of Burundi ???? offtake. The lower processing cost of that basket would certainly help with PRE's business plan (as it would be shipped to SA to be processed at the gypsum stack plant first - there is a sulphuric acid factory next door).
The salted plant will be great if it can be paid for, other mine offtakes will become available, as funding may be more freely available to them with a Western processing facility.
There is some thorium and uranium in the Angola mining asset that needs processing. I suspect Pensana MREC process has a methodology to deal with thorium and uranium separation before anything goes to Saltend. I believe one Canadian miner found a similar process to separate those two radioactive elements and so Pensana is not alone in coming up with innovations to deal with the issue. Some other markets may also want the material as fuel for their nuclear reactors, but that may need more of a work up after everything gets built. Another factor is the Angola resource is so large that they can mine plan around where radioactivity is the highest and not disturb it and still have decades supply of feed to Saltend.
The Pensana sulphate MREC did give a cost figure in the business plan and it was lower by around 10% from other rare earth miners (excluding gypsum stacks of rainbow rare earths), however its best to assume they end up the same as the other rare earth miners in a similar position to themselves. Pensana MREC also has a process, so they claim, to take it up 33% ratio apparently so there is is one additional step they need to do, however most of the profit is made at the Saltend facility which Rainbow does not have in its plans. I dare say Saltend may be able to take some of Rainbow's feedstock if the two companies want to work together especially if the South Africa source saves Pensana monies and Rainbow got more monies than if they sold it to Chinese processors. Tony