Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Really excited about this share. Its £1.2 billion revenues over 20 years. Oprx £10 million per annum. Life of caverns could well double. So £2.4 billion revenues excluding inflation. £6 mill mcap. Already bagged here but have no intention selling any. 6-10p for me. we will see, Im viewing this as a long term investment as it is very un aim like in the way this is and should behave.
The numbers are staggering, Eyeguy, but let's remeber that the lion's share of them (and the associated capex to get it up and running) will accrue to the ultimate project equity owners. Petronas has been mooted, for instance.
What I can't get my head round still is how much of these revenues can/will flow down to Infa, on a recurring basis, or capitalised upfront in a buy-out.
Got to remember imo 5p sp is still just over £50mill mcap
Yes, and that will take the buyer's total cost - capex + full equity ownership - from £300mn to £350mn. They will need to do their IRR sums on that basis.
£300m? You don't know that to be true.
By the time the FEED is complete approx £15mill will have been spent on the project. JW the new CEO is obviously very bullish and expects significant upside. I'm looking forward to the revised economics taking into account potential double project life and significant increase in storage volume. Cherry on the top would be an EU grant towards CAPEX
The phased development will also make this much more attractive imo. Much reduced upfront CAPEX
O and W. Agree but also note the phased development and the possibility of grant funding to some degree plus reduced capex too. Not forgetting the doubling of the LOM so doubling revenues after the initial capex has been met.
For me holding long term. I think we could well be seeing muliples so risk vs reward v favourable at this mcap
Not forgetting that almost 2/3 of CAPEX is covered under the UK government guarantee scheme. So will basically be a loan at zero risk to the lender so will attract very favourable terms
All very good points and noted, even the £300mn capex number in the Infa presentation (schlemiel!) is subject to downward revision if efficiencies can be generated.
I'm a newbie believer, guys. I have bought 3mn shares this last week, and I plan to buy more in time. It's just that I try to see things from the project owner's point of view, not just the gross revenue numbers, which are mind-blowing in relation to the current MC, I agree.
Still a risk of course o and w. But directors seem driven and are aligned with s holders interests. Certainly £6 mill seems too cheap to be where this is. Considering construction starts next year. Market yet to fully catch on
I see Islandmagee as a strategic fit in Ireland's need for energy security. This is especially the case with the closure of the Kinsale gas storage facility, and Rough in the UKNS, there is a clear need for long-term (10 years and up) forward planning to replace these facilities that were supposed to offer greater flexibility and security of energy supplies. So I see very little political resistance to this project, in fact the reverse, a positive wish to endorse it. I also don't see any environmental lobbies shouting out against it going ahead. Licences and permits are in place. All good. Even Brexit can't damage the project as it already pre-qualifies for a UK government guarantee on the credit financing side.
Risks are:
That the FEED study runs into unexpected technical complications requiring more work to be done and missing the December deadline for submission to the EU relevant body.
A Brexit hard exit leads to uncertainty amongst potential buyers of the project until grants, loan guarantees, access to UK bank credit etc, are resolved.
Plans go ahead for a new oil terminal at Cork to hold US frakked oil go ahead, in a size that rivals Islandmagee's storage potential.
Any other risks?
Otherwise, it's a solid long term buy and hold into 2019, and thereafter, although I would reckon that the sp will spike into a "construction green light" decision and then cool off for quite some time until first gas is stored. But by then Infa will probably be long gone as an independent entity.
O and W, I'm long. Bought in before requisition, voted for AP and PW, watched sp go up and then down without taking profit. Sold at breakeven. Then bought back in at .24. and averaged up at .5. one risk that is very real and can be found by reading this very thread back to 2016-17 is local opposition, some environmental, some not on my doorstep.
That's interesting, MegaTron. I take it that you are a local yourself rather than living far away as I do, in E Anglia. I don't know the extent and tenacity of the environmental groups opposing the project but can I just say from my many years of experience in seeing the Sxx NYNPA potash project get underway, that Infa needs to mount a stout but objective front foot. They should, and presumably are already, emphasising the minimal above ground footprint of the finished project, the benefits to the local economy in terms of job creation, the sympathetic construction plan to minimise upsetting the local fauna and flora etc etc. At the end of the day, Infa has its planning permission, which was hard won by sxx eventually. So I'm sure these factors weighed heavily in their favour at the time votes were cast in favour.
Not a local. Just skim read through the previous years BB posts before investing. Nearly all of the opposition was directed at the wacky oil drill play in Woodburn. It was a car crash in local PR terms that current board would be well advised to read up on! Infratstrata may be new to them, but it's not well loved as far as I am aware. Maybe it's different in Larne, but Woodburn locals hated em and for good reason.
The new board will be aware of Woodbury! Infa have a local community Liason representative who lives on Islandmagee and she has been involved in the storage project for about 12 years. Judith is a key part of the project imo
*woodburn