The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
GUG - yes I know, thanks, hence me saying that i saw my error.
Disco your statement was "So worst case scenario on 60t sales is opex of 600k, giving an EBITDA of $336k."
Its wrong. The OPEX will NEVER EVER be $100 on 60t per month of production.
If you asked what the OPEX MIGHT be if this was producing 2700t W pa and 400t Sn pa. I would have given you a different answer.
Buy you believe what you want to believe. The Interim accounts for H2 will soon be upon you. and youve a whole 9 months to wait to see the FY results for 2021. Hope spings eternal and all that
ah yes GUG I see my error. 100 / mtu was per the 2017 FID and of course is based on the production mentioned in the FID.
You've mentioned 248 / mtu but of course that's only because of the low production numbers in 2020/21. As production increases i see between 120 and 130 per mtu - thanks Tro for clarifying and thanks for reminding me of the Shard report.
Disco. The OPEX is not $100 per mtu.
Take a look at the Shard marketing report from April of this year. https://wresources.com/wp-content/uploads/202104-Shard-Capital-WRES-Research-Note.pdf
Page 7 there is a table. You can see in that table an estimate for 2021 based upon Total Concentrate production of 910t. (662W and 228t Sn)
The OPEX is stated as $248 per mtu. Irrespective of the sale price of product It costs the same amount to bring it out of the ground and process it whatever the eventual sale price is)
In broad terms, if WRES produce more then 910t combined then the OPEX per mtu will be lower, conversly if production is less than 910t then the OPEX per mtu will be higher.
Safetynan. You wrote at 10.59 "Hence, I always understand it to be we get 80% of APT price. You go ahead and twist as much as you want."
Can you explain what I am twisting when at 7.56 I wrote "The price is for APT and that contains 79.3% W Concentrate. Thats why you get 80% (79.3%) of the price"
You seem to be having an argument with yourself. Leave me out of it
Going, At last GET has a grasp of the figures.
" Can you check my maths please, if our Q4 production is say 100 Tons of Tungsten and 50 Tons of Tin am i correct in thinking our revenue would be circa 100x $17,500, plus 50x $19,000, which would give us revenue of $1,750,000 plus $950,000, so a total of $2,700,000 "
And the scary thing is the other numbties agreed with him !
I suppose we all make mistakes.
So worst case scenario on 60t sales is opex of 600k, giving an EBITDA of $336k.
Shame about the ITDA!
opex i believe are around $100/ mtu, but don't know the fixed/ variable split.
I think we're all on the same page now ref revenue.
60t at say 300 per mtu is 60t at $30,000 = 1.8m.
Multiplied by 80% due to end product (not off take agreement) = 1.44m This then multiplied by 65% is $936k.
GUG, FID says ? Investment Analysis: Based on an APT price profile incorporating a long-term price of US$300/mtu (66% WO3 product, realising 80% of the APT price 2017 dollar terms) and a EURO dollar exchange rate of US$0.91.
Which is from 2017, and also conversations. Hence, I always understand it to be we get 80% of APT price. You go ahead and twist as much as you want.
Yep, looks correct based on the assumptions of price and grade :)
FYI from 30/04/19
"Two major long-term offtake agreements were signed in February. The first with Wolfram Bergbau und Hütten AG, ("WBH"), the largest tungsten processing company in Europe and the second is directly with a leading supplier to the USA tungsten markets.
With production commencing in November 2018, ahead of the ramp-up phase, W is pleased to have completed the first shipments of tungsten to date. The process is straightforward in that the offtaker arranges collection and the Company is then paid within three days.
Going forward, W will supply both with approximately 66% tungsten concentrate on competitive pricing terms. The offtake agreements cover the initial T2 development of the La Parrilla Mine and will account for approximately 80% of the planned production tonnage from this phase. There is significant demand for the balance of production which W plans to secure offtake following initial production start-up."
That's good, thanks for confirmation.
Isn't agreement a rare and wonderful thing?
IE
Superfly
We shipped 60 tons in August and I used $300 per mtu and 65% purity so the sum doing it your way was 60 x 100 = 6000 x $300 = $1,800,000 x 0.8 = $1,440,000 x. 65% $936,000
Getintheres calculation is correct. Just the rational behind why its 80% is incorerect
Assuming $300 per mtu and 65% grade
$300 x 0.8 x 0.65 x No of MTU
20t = 2000mtu So thats $312k
Or
APT X 20 X 0.65/0.8?
GUG
So, by your Reckoning, how much do WRES get paid for 20T of 65% Tungsten concentrate?
APT X 20 X 0.65 ?
Safetynan "under the offtake we get 80% of that price"
NO. Is it taking time to sink in? APT contains 80% (79.3%) W. The reason is not the "offtake" agreement. The reason is the end product.
My understanding is that; we produce tungsten concentrate, the price we get is based against APT price, under the offtake we get 80% of that price, we get paid for the actual tungsten content. So whatever the APT is per mtu we have to reduce to 80% then again by the metal contained which has been 66% lately.
We are producing more each month and prices are higher than last year.
There are 2 variables in this . Obviously the price, the other is the "Grade" shown as 67% in your example.
ATP is now higher than it was when I asked the question :)
For anyone newish to this board / discussion the following formula for calculating what we recieve for a 20 ton bag was confirmed by wres investor relations a little while ago. Hope it helps:
20 tonnes x 100 (to convert into MTU) = 2,000 x $250 (current ATP price) = $500,000 x 80% (offtake agreement) = $400,000 x 67% (to account for the grade) = $268,000
Safety
Agreed, that’s why we only get a percentage of the APT price mate, but that would still have been circa $936,000 for our 60 tons of tungsten shipped in August ;-)
There may well be a discounted price to the offtake partners too, but Masterman said that you get the full market price in the past.
Thats correct Safetyman. The price is for APT and that contains 79.3% W Concentrate. Thats why you get 80% (79.3%) of the price
It is NOT what Getinthere said. He said that it was a 20% discounted price to offtake partners.
Everyday is a school day safetyman.(& getinthere)