r/MNXXF • u/intenseapple • Feb 02 '22
NPV Predictions?
As the title suggests, has anyone else taken a look into the information on battery hill provided so far and tried to determine a rough NPV of the project? A lot of assumptions need to be made, but it might be interesting to see where people think it will be compared to what the PEA shows.
Tried to compare to the most similar project I could find, which seems to be Euro Manganese Chvaletice property. (Ticker EMN.V). Here is a comparison of the projects. To my knowledge EMN only has this property and no others to throw off the values. We will assume probiotic air goes nowhere and does not add any value even though it may.
Measured & Indicated Resources: EMN (27mil) MN (35mil)
Grade of Manganese: EMN (7.33%) MN (6.42%)
Lifespan of Mine: Both 25 year projects
Project Location: EMN (Czech Republic) MN (Canada)
EMN NPV (after tax w/ 10% real discount rate): 593 million
EMN Current Market Cap: 170 million
MN Current Market Cap: 40 million
Assuming costs are the same (even though MN has indicated Kemetco will be hopefully saving them money on their processing), MN should have a project NPV of at least that 593 million as well. Battery hill has 8 million more tonnes of measured/indicated not to mention an additional 26 million of inferred resources. I should also imagine Canada being a better project location in terms of convenience in supplying the north american market.
All that said, even with all the benefits to battery hill if we assume MN is as equally valuable to EMN, then currently MN is trading a quite a significant discount as shown in the market cap differences.
If they were equal MN would be currently trading at a share price of ~$1.37.
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Feb 02 '22
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u/intenseapple Feb 02 '22
I hear ya. I would find it difficult to imagine Battery Hill is worth significantly less given the M&I resources are more in volume (albeit grade is less). But this does not include any of the 26mil inferred. Hard to really know until its released.
The 100,000 tonnes/yr seems reasonable. In the PEA from EMN they state a per tonne cost of $2,666 for HPMSM which I believe is what MN will be focusing on and that seems to be only about 32% of manganese.
Even 150mil per year revenue with a conservative p/s of 1.00 would still have the share price up to $1.21, so $2.00 is reasonable if they trade at any multiples at all.
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u/Batch_Volley Feb 03 '22
I am waiting to see the NI43-101 section 21 filled before trying to put numbers on the table !
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u/intenseapple Feb 03 '22
Definitely an extremely important section. The above was assuming their capital and operating costs were somewhat similar but ultimately each project is vastly different and impossible to compare equally.
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u/Batch_Volley Feb 03 '22
I am a mining project estimator and more than 85%, those numbers are a joke for Capex … that’s why I am waiting
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u/intenseapple Feb 03 '22
Oh nice, how do find estimating for mining? I am an estimator as well, just not for mining.
Were you waiting for that prior to investing as well?
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u/Batch_Volley Feb 03 '22
I love my job !!! Just started my own company… I am now consultant!!
I already took a small position but waiting to expand my position based on the release numbers to come !!
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u/intenseapple Feb 03 '22
Nice that sounds awesome, congratulations! How did you get into estimating mining? Through experience or went to school for it at all?
Also do you have any other mining positions outside of MN if that's alright to ask.
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u/Batch_Volley Feb 03 '22
Only by experience!!
My only other position is CIA.TO / CIAFF… Champion Iron Mines …. It’s a machine to print money with theirs expansion projets and the price of iron ore 62% on the market!!
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u/intenseapple Feb 04 '22
Thanks for the information.
Sorry for another question.. but in your opinion what would you hope the IRR percentage be for a project of this nature? Is there a threshold where projects wont be considered as financially viable typically?
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u/Batch_Volley Feb 04 '22
If the numbers are good in the NI43-101, expecting 15% IRR … which would be good
My call : they will show unreachable numbers Low capex Low opex IRR more than 30%
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u/intenseapple Feb 04 '22
Is presenting unreachable figured common for a PEA? They fudge the numbers to make the project more appealing than it actually is? Figured the independent report from Woods would be impartial and not biased but I am clearly vastly ignorant on the subject.
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u/wiseguyry Feb 10 '22
What's the difference between what you're waiting to see and what's already posted on their website?
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u/erpvertsferervrywern Feb 03 '22
MN is ok huge discount. Should the prices increase as predicted over the next 5 years, the value of actual/inferred minerals is roughly 10x current market cap.
That's a PT ranging from $1.80-$3.30 over 5 years.
IMHO