So 1.4M tonnes at 4% (east pipe only) implies 'only' 35M tons of ore. I do think it'll be bigger than that.

Let's say they consume it all within 28 years (I could make it 14 years to ramp up the NPV but I won't). That's 50,000 tons per year of product, at $5-7,000 per ton that's revenue of $250M - $350M per year.

So if Capex is $200 M and overburden $100M, with a production cost of $1200 (twice that of chief's $600), net profit is $3800 to $5800 per ton so $190M-$290M per year. Add $30M/year for chief's cost figures.

What's a project like that worth? It's worth more to someone that can get a benefit of controlling the supply of Zen's unique graphite than to someone JUST looking to profit off the mine.

If the owner of the project doesn't own a car manufacturing business (that is looking at having the only batteries that customers want when buying an electric car - so that for example, if this were true they would derive $125M excess profits from their core business), or some other end user that sees a strategic benefit out of making a bid for the Albany project, then you would get a lower offer based just on the mine economics...

If the offer comes from someone that can also gain an economic advantage (an extra $125M per year 'strategic benefit' would help to move offer up by at least 50% for example...(so let's phone toyota), the offer they make could easily be much bigger than based on the mine project NPV alone.

With a P/E of 4 the project above would be worth a billion.
with 60M shares out, that's $16/share. 4 is a very low multiple. OK, let's start getting a bit more accurate with our back of envelope calculations. Soon it'll be time to get away from the insitu value model and see what other valuation models will produce...Roth calculated a NAV way early, and it's still way early...but....well, here goes...

The conservative net present value at 10% on the above 50K ton/year production (assuming highest $1200/ton costs and $5K revenue), and 25%, 50%, 75% then 100% capacity in year one two three and four....and 100% financing
(6%) (which is also worst case scenario from an npv point of view)...

would be $985 million with a 5.5 year payback of original project capital.... this is again, assuming there is no 'side benefit' of also being the end user and getting a strategic bump to your core business. $16/share "NAV". Of course, if financing wasn't 100%, things would be a bit different. 50/50 debt to equity financing would move payback up by 6months, and NPV up by $30M and NAV would be about $13.5. Now, there a reason why this doesn't exactly conform to Roth's model, and it's important to observe this point....theirs is based on only 38K tons annual production.

When Zen delivers a much bigger 43-101 and Roth can then justify scaling their model up based on a higher annual production... their NAV calcs will go up again by another $2 to $8/share. Their current outlook is based on 23M tons of ore, resulting in a mine plan that only gets to 38K tons per year product. TCC's overall opinion is that the tonnage will be much larger (at least double that 23M), supporting a bigger annual production capacity. Aubrey has suggested 100K tons production per year? Roth is using only 38% of that?

Roth's last report: 38K per year production, $8K/ton revenue, 12% discount rate, and their NAV was $15 on 74M shares. Change any of these inputs, and the output NAV changes. Roth will move their production forecast up to at least 50K/yr once the 43-101 is out, IMO. They have been being cautiously optimistic - except where revenue is concerned, where they have always bought into a higher average revenue number ($8k/ton). It seems they have been convinced that this competes with at least some lower priced applications of synthetic. Now, after a better description of the metallurgy, everyone should be.

Roth's $4NAV report was based on 26K tons/yr production. Then they moved it to 38K....next will be 50k...and the PEA will be based on larger.

When I move the revenue to the higher $7,000 per ton, that would mean an extra $100M net profit on that 50K ton/yr (100% financed) project. That would bump the NPV (10%) above to 1.65B and payback to 4.5 years.

Now, I actually added in a significant amount (one extra year) of mine development time upfront, and spent the entire $300M costs on day one as if you said to the pit crew, "here's your $100M, get this overburden out of here in 12 months". I had to simplify. At this point in time, there's no point getting into monthly cashflows...

So that would be $27.5/share "NAV". $22.5 if 15M shares were sold for some equity financing...

OK, so what am I getting at?

All the info that has been released so far to date continues to support the TCC version of this story. High grade graphite, massively economic project, huge upside, competes with some sythetic, we could hear down the road that it's good enough for much bigger revenue (nuclear, etc). But even the $5-7k per ton floor area supports Roth NAV calculations once a bigger annual production is used in the PEA. That Roth NAV was $15/share. It'll be north of $20 if they use 50K tons per year production or more. The PEA will be using more.

If a buyout were to occur, you would hope it would be bought by someone that is getting more of a strategic lift out of the supply of this special graphite. They may be able to justify paying significantly more than these type of NAV calc's, or those that come out of the PEA.

I still believe we are 'waiting for the tonnage' so that these NAV calc's can be tightened up a bit...and I don't expect a buyout before the 43-101. But after that, not only can institutional investors buy in, a buyout before the PEA could be a real possibility.