$CPMMF : Crystal Peak Stake Initiated in November

We stalked this trade a long, long time. See our 9 July analysis of the company here: Crystal Peak Minerals — Independent Economic Analysis

We got in at a considerably better average price over the last month than we ever imagined (U.S. $0.0577). But why did shares get so cheap?

I don’t have an answer. Insiders haven’t abandoned the stock. Director William Basse bought a few shares last week. The Cynosure Group may be shedding shares and EMR, which owns a > 60% stake, may be shedding shares, too. Who knows?

The Department of the Interior has authorized construction at Sevier-Playa, a huge de-risking milestone, and one of two factors for which we were waiting as would-be investors. The second factor was price: we weren’t going to pay a lot for the greenfield Project in the present SOP climate.

Price may also be anticipating the impact of debt and equity financing, an announcement about which could come by Q2 ’20, with construction set to commence in Q2 ’20, as well. Debt will be approximately 60% of project finance. I’d like to see an off-take account for up to an additional 15-20%, with the remainder achieved with equity at a later date.

$CPMMF : Crystal Peak Minerals — Independent Economic Analysis

Long-Term Price Case$645/t K2SO4
Flagship ProjectSevier Playa
Ownership100%
Mineral Reserves7,734,000 tonnes
Shares Outstanding348,594,751
Market Cap$40,785,586
Average Annual Production205,700 tonnes
Recovery80%
Payable Product6,171,000 tonnes
LoM30 Years
True All-in Cost (TAIC)$424/t
Gross Revenue$3,980,295,000
Royalties($222,896,520)
Net Revenue$3,757,398,480
Total Operating Costs ($1,372,677,240)
Operating Cash Flow$2,384,721,240
Income Taxes($372,016,513)
Total Capital Costs($646,489,167)
Net Income$1,366,215,560
Net Profit Margin34%
Absolute Cost Structure (ACS)66%
MTQ Score (Higher is Better)0.5
True Value$3.92/sh.
True Value Discount (TVD)97%
Cash Flow Multiple10x
Net Annual Cash Flow$45,459,700
Future Market Cap$454,597,000
Future Market Cap Growth1,015%
Target$1.30/sh.

Notes: All Values in U.S. Dollars

Crystal Peak Minerals is a top-rated stock with an MTQ Score (0.5) that is above average and a Composite Rating of 5 (Scale of 1-5).

Above $600/t K2SO4, Crystal Peak Minerals will enjoy both a Net Profit Margin > 30% and an Absolute Cost Structure below 70%.

MTQ Score (+ Composite Rating [Red Dotted Line]) — Study Group Comparison