|Probable Realized Market Prices||$645/t K2SO4 & $147/t H2SO4|
|Flagship Project||Blawn Mountain|
|Fully-Diluted Market Cap||8,100,400|
|Proven & Probable Mineral Reserves, 3% Cut-Off||153,330,000 tons|
|Payable Product (LoM)*||16,096,051 K2SO4Eq tons|
|Estimated Payable SOP (LoM)||10,603,000 tons|
|Estimated Payable Sulfuric Acid (LoM)||24,135,000 tons|
|Alumina Resources (M&I)**||19,418,000 tons|
|Average Annual Production||351,261 K2SO4Eq tons|
|True All-in Cost (TAIC)||$546/t|
|Property Taxes (2%)||($207,639,058)|
|Total Capital Costs||($537,000,000)|
|Net Profit Margin||15%|
|Absolute Cost Structure (ACS)||85%|
Notes: All Values in U.S. Dollars
*This analysis hinges on Payable Product tonnages, as opposed to a sum of Proven & Probable Reserves, including: Direct Feed-to-Mill, Medium-Grade Stockpiles and Low-Grade Stockpiles. Analysts will likely be expecting a much larger number (153.3 Mt) for valuation computations. That number isn’t of interest to us in this analysis, today, as our case is predicated on estimated payable product.
Furthermore, we have elected to utilize K2SO4Eq tons in the stead of deducting sulfuric acid credits from our Direct Operating Cost Matrix. This has the effect of raising our independently-calculated True All-in Cost (TAIC) to $546/t, which is an increase of 159% from Millcreek Mining Group’s Cash Cost number ($211/t).
**Alumina, which trades for about $472/t, is classified as a waste byproduct of production. However, efforts are being made to develop a pilot plant 12 miles away from Blawn Mountain in Milford at the site of Tamra’s shuttered copper flotation mill to determine whether or not Alumina waste can be economically monetized.
The value proposition for SOPerior Fertilizer Corp. remains clear. Additionally, a handful of derisking events have occurred that lend further credence to the SOPerior story. Nevertheless, in spite of the positive news flow, we have chosen to be more conservative with our analysis than in the past.
Net Profit Margins are low and Absolute Cost Structure (ACS) is high. Consequently, we have assigned SOPerior with a conservative 5x Cash Flow Multiple.
|Average Annual Cash Flow||$35,000,000|
At 5x Average Annual Cash Flow, SOPerior could sport a Market Cap of ~$175M, which implies a potential Market Cap Growth of 2,060%.