2.21 Chapter 21 - Business - Case
2.21 Chapter 21 - Business - Case
2.21 Chapter 21 - Business - Case
er 21 – BUSINESS CASE
C
21 BUS
SINES
SS CA
ASE
21.1 INTRO
ODUCT
TION
The purp
pose of this chapter
c is to assess the ffinancial valu
ue of the PdF
F Project.
Economic assumptions
s; and
Results of the BFS fina
ancial modellling.
apter has be
The cha een develope ed with the support of independentt specialists as well as in-house
manageers in all area
as related to financial
f asp
pects of the Project.
P
The finaancial mode el evaluatess a base caase and se ensitivities around this case. The potential
profitability of the Pro
oject has bee
en measured ollowing key financial critteria:
d using the fo
Annual and
d cumulative
e cash flows;
Net Presen
nt Value (NP
PV), before an
nd after taxe
es;
Internal Ra
ate of Return (IRR); and
n and payback periods.
Break-even
The eco onomic evaluation has been condu ucted on a post-tax, pre e-finance baasis. Througghout the
analysiss process, it assumes
a 100
0% equity inn order to ass
sess the Project cash flow
ows before th
he impact
of debt interest and repayment
r calculations.
c
The fina
ancial model is expressed
d in real term
ms and with th
he results su
ummarized inn Table 21.1..
Table 21
1.1 – Key Prroject econo
omic results
s
Unit
U Tota
al
NPV 9% d
discount rate (Affter Tax) (USD million) 1,54
42
IRR (Afterr Tax) (%)
( 19.8%
Initial CAP
PEX (USD million) 2,000
0.3
Sustaining
g CAPEX (USD million) 998
8
Average O
OPEX (USD/t dry FOB) 24.8
83
Assumin
ng a discount rate of 9%, the NPV aftter tax is ove
er USD 1.5 billion and IRR
R is close to 20%.
21.2 ASSU
UMPTIONS
21.2.1 Project sc
chedule
The CAP
PEX schedule is based on
o the overalll Project sch
hedule.
BAMIN – P
PdF Project BFS
S, August 2016
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Chapter 21 – BUSINESS CASE
Project Execution Phase: The Initial CAPEX spend will commence July 2017, at the start of
Project development and construction, and continue through till March 2020 at the Mine Site
(33 months), and until August 2020 at the TUP (38 months).
Operations Phase: Commencement of operations is planned for April 2020 at the Mine Site,
and September 2020 at the TUP. At this time, the Initial CAPEX will have been expended.
OPEX and Sustaining CAPEX spend will then commence and continue until the end of the
life of mine in 2049.
The following key macro-economic assumptions have been incorporated in deriving a Project NPV.
Financial modelling is expressed in real terms, at a date of June 2016. All cost and price inputs have
been developed during 2016.
21.2.2.2 Discounting
A base case discount rate of 9% (real) has been applied. The NPV is calculated as from July 1, 2017,
which is based on a discounted cash flow valuation of the post-tax, pre-finance cash flows resulting
from the financial model.
Costs have been entered in the financial model in the currency in which they are expected to be
incurred, which in turn has been based on detailed, strategic procurement analysis conducted by
BAMIN and its engineering consultants.
In real terms, the financial model converts local BRL costs to USD. The exchange rate used has been
forecast by CRU in July 2016, averaging 3.63 BRL against the USD over the life of mine. Figure 21.1
shows the historical exchange rate and the accentuated depreciation of the BRL between 2011 and
2015. This is mainly a result of two forces: the valorisation of the USD due to the recovery of the US
economy and the crisis in the Brazilian economy.
The Brazilian Central Bank forecast of August 2005 shows a flat exchange rate of around 3.60 which
is very similar to CRU July 2016 forecast currently being used in the financial model.
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Figure 2
21.1 – Annual average exchange
e ra
ate (BRL/US
SD) 2000-202
26
Figure notte:
Source: BAMIN
N
Bacen – Banco
o Central do Brasil
All cost assumption considered in the mod el are valid as of June 2016, and aare in constant price
terms. TThe revenue e assumption n used in the e financial analysis
a his Project aare in 2015 constant
of th
price terrms. There iss further upside if the Re
evenue assum mption was tot be broughht in line with
h the cost
assumpttion to 2016 terms. The financial
f moddel start date
e for Project developmennt and construction is
July 1, 2
2017.
21.2.4
4.1 Initial CAPEX brreakdown
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Figure 2
21.2 – Initiall CAPEX
The infrasttructure and export logisstics CAPEX (water, pow wer, railway aand port) am
mounts to
USD 1.024 4 million, acc
counting for ssome 50% off the Initial CAPEX.
The process plants CA
APEX amou
unt to USD 389
3 million, accounting
a ffor 19% of the
t Initial
CAPEX;
The mine CAPEX
C amounts to USD 174 million, accounting for 9% of thee Initial CAPE
EX
The Owne ers cost (wh
hich includess EPCM) as ssociated witth the Projeect developm ment and
constructio
on amounts to USD 156 m million, accounting for 8%
% of the Initiaal CAPEX; an
nd
A continge
ency of 9.45%
% (9.6% for the Mine Sitte including the
t rolling stoock and 8.9%% for the
port) has been applied to the Ini tial CAPEX,, totalling US
SD 173 millioon. The con ntingency
percentagee has been calculated
c ussing the Mon
nte Carlo Anaalysis as expplained in Ch
hapter 17
– Costs.
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PdF Project BFS
S, August 2016
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Figure 2
21.3 – Initiall CAPEX by cost centre
e
The ma ajority of thee Initial CAPEX (59% or USD 1,176 million) will w be spennt on buildings and
construcction works. Equipment account
a for 4
40% (or USD D 793 million) of the plannned expenditture. Pre-
operatin d and capital spares are rrelatively neg
ng costs, land gligible costs
s.
21.2.4
4.2 Initial CAPEX prrofile
alysis assume
The ana es a creditorr period of 30
0 days during
g the constru
uction phase..
Figure 2
21.4 – Initiall CAPEX dis
stribution (ex
xcluding co
ontingency)
181
750
605
291
Tax ince
entives
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PdF Project BFS
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21.2.5 Sustaining
g CAPEX
Sustaining CAPEX is the term used to desscribe the on ngoing capittal investmennt, which is required
during th
he operationnal life of the Project in o
order to enabble realisation of the full business op perational
plan. Th
he Sustainingg CAPEX ha as been calcculated to bee USD 998 million
m over thhe life of the
e Project.
The tota
al sustaining capex translates into US SD 3.25/t product.
The majjor element (50%) of Su ustaining CAAPEX is cen ntred on the mining ope rations, as shown
s in
Figure 221.5. Owing tot the detaileed mining sch hedule produuced, BAMIN N has been aable to sprea
ad out the
capital in
nvestment re equired (in particular
p rela
ating to mining fleet for the
t movemeent of ore an nd waste)
over thee life of mine. All of the Sustaining
S CAAPEX will bee self-funded from operattions. The Sustaining
CAPEX is detailed in n Chapter 17 7 – Costs.
Figure 2
21.5 – LoM Sustaining
S CAPEX
C
The pro
ofile of Sustaaining CAPE EX is presen nted by activ
vity in Figure
e 21.6. The early build-u
up of the
mining ffleet can be seen
s in the early
e e replacement and increaase in fleet size.
years, and then the s The
TMF raisse between 2027
2 and 20031 is also evvident.
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Figure 2
21.6 – Annual Sustainin
ng CAPEX
21.2.6 Operating
g expenditu
ure
Figure 2
21.7 – LoM OPEX
O
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Figure 2
21.8 – Unit OPEX
O by acttivity
21.2.6
6.1 Fixe
ed OPEX
Figure 2
21.9 presentss the fixed co
osts by cost ccenters.
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PdF Project BFS
S, August 2016
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Figure 2
21.9 – Fixed
d OPEX brea
akdown
The ave
erage fixed unit cost of th
he Project pe er tonne of concentrate sold
s is USD 88.26/t at full capacity,
amounting to 33% off total operatting costs). T
The key cost centres are:
Varia
able operatin
ng costs
Figure 2
21.10 breaks down the va
ariable cost b
by cost centrre.
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Figure 2
21.10 – Varia
able OPEX Breakdown
B
21.2.6
6.2 OPE
EX profile
The OP PEX profile iss presented in Figure 2 1.11. The re elative propoortion of varriable (direct variable
production costs an nd tracking costs)
c to fixe
ed costs (thee remainder) is fairly coonsistent and d can be
clearly sseen here. Th ost are incurrred post production for five years.
he closure co
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PdF Project BFS
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Figure 2
21.11 – Annual OPEX
Figure 2
21.12 presents the breakd
down of OPE
EX by cost ce
entre.
Figure 2
21.12 – OPE
EX by cost centre
21.2.6
6.3 OPE
EX summaryy
The ave
erage annua al OPEX is USDU 24.83/t product sold d. Fixed cos
sts (labour, ooutsourced contracts
c
and other services) account forr around 33% % of the av verage total (operating aat full capacity). This
means tthat the Proje
ect has limite
ed vulnerabiliity to relative
ely low opera
ating levels.
BAMIN – P
PdF Project BFS
S, August 2016
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Chapter 21 – BUSINESS CASE
21.2.7 Revenue
The Project will have two high quality iron ore products, namely direct shipping ore (DSO) and direct
reduction pellet feed (DRPF). These will be produced and sold into two separate markets.
The DSO will amount to 117 Mt over 10 years of operation. The DSO will be a sinter feed
with an iron ore content of >64%.
The DRPF will have a higher Fe content of >68%, thereby attracting a premium, and will
constitute a major proportion of total sales at >190 Mt over 30 years of operation). The
DRPF product price assumes a 10% premium.
Should the market demand a lower grade concentrate than the DRPF, BAMIN’s processing
facilities are able to produce a blast furnace concentrate (BFC) with a Fe grade just over
67%, which has a wider market than the DRPF
Revenue in the financial model is also subject to production losses. Production losses occur during
the mining operations through loss and dilution, during processing and product transportation. The
financial model applies a 0.1% to the volume of product shipped/sold. This has the effect of reducing
the revenue generated due to the expected loss of product throughout the material handling
processes.
BAMIN assumes that sales will meet 99.9% of the planned production output from the Mine Site
(allowing for the assumed handling losses).
BAMIN’s market strategy is to export 100% of the output. Therefore, it has been assumed that 100%
of revenue will be in USD.
The price forecasts used in the financial model has been developed by CRU. See Chapter 19 –
Market Study and Commercial Plan, for further details. The model uses two baseline forecasts:
DRPF – BAMIN assumes a sales price which includes a 10.0% premium; and
DSO – BAMIN’s assumes a sales price with no premiums or discounts.
Figure 21.13 presents the price forecasts, in 2015 terms, used in the financial model.
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Figure 2
21.13 – Price
e forecast
Revvenue breakd
down
Figure 2
21.14 – Sale
es Tonnage by Product Fig
gure 21.15 – Sales Reveenue by Pro
oduct
Revvenue summa
ary
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PdF Project BFS
S, August 2016
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Figure 2
21.16 – Annual sales tonnage, reve
enue and op
perating marrgin
Firstt fill
First fill iis the term used to descrribe the mate erials require
ed during the first attemptt to run each
h stage of
the prod duction proce ess from starrt to finish. T
These include e costs for mill
m balls and reagents wh hose cost
has bee en calculated d to be approoximately US SD 0.9 million and is treaated as a onne-off workin ng capital
item, ap duction begi ns in 2020. Other items such as spaare parts, wa
pplied directlyy before prod arehouse
stock an nd lubricants, spare tyres etc. have be een considerred in the capex.
Creditorrs are the deelay in BAMMIN making p payment to its suppliers (cash outfloows). This has
h been
calculateed as an equ of production
uivalent number of days o n costs. For the study thiis has been assumed
a
to be 30
0 days. The same
s payment period ha s also been assumed du uring the Projject Executio
on Phase
and appplied to the CAPEX.
Stoccks
The RoM stock (unprrocessed ore e stockpiled between th he mine andd plant). No working
ovision has been made for this sto
capital pro ock in the model.
m Althouugh conventtionally it
should be treated as work-in-prog gress and reflected
r in the balancee sheet, insttead, the
mining cosst is charged in the year tthat it is mine
ed to annual OPEX rega rdless of whether the
material is processed or
o not. This ttreatment ex xaggerates th
he OPEX in tthe early yea
ars and it
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PdF Project BFS
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Figure 2
21.17 – Annual working
g capital
21.2.8
8.1 Working capital summary
21.2.10 Taxes
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PdF Project BFS
S, August 2016
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Chapter 21 – BUSINESS CASE
The financial model incorporates a number of detailed income tax assumptions. A combination of
rebates, expenses, and tax offsetting has been developed in line with appropriate tax guidance.
Assets qualifying for eligibility under the terms of the SUDENE incentive plan can be depreciated
under accelerated terms in the first 12 months of use, up until a cut-off point at the end of 2018. It is
reasonably expected that the period for which the benefit is applicable will be extended. Therefore, for
the purposes of this BFS, the Initial CAPEX identified as eligible (all with the exception of specified
non-depreciable taxes: PIS, COFINS & ICMS) is treated as accelerated depreciation.
ICMS recovery is assumed to be granted for the purposes of the financial analysis. The ICMS cost is
incurred and BAMIN assumes that it will sell 50% of the credit, adding USD 260 million back into the
cash flow during the LoM. This percentage will be negotiated during the Operations Phase and could
result in a potential upside of the NPV of up to USD 80 million.
Output taxes are those payable on profits during operations. They have been applied in the model as
follows.
With the guidance of tax advisors, BAMIN has assumed that it will obtain income tax benefits (see
Chapter 18 – Taxes, SUDENE rules) for projects located in the northeast of Brazil. The benefits allow
for a 75% reduction in the income tax rate of 25%, bringing the income tax (IRPJ) rate to 6.25% for
the first 10 full years of operations. Accordingly the income tax rate applied for the first 10 complete
years of operations is 15.25%; comprising 9% compulsory social contribution (CSLL) plus 6.25%
income tax (IRPJ). The period both before and after this 10 years, see tax rate revert to the usual
34%; consisting of a 9% compulsory social contribution plus 25% income tax.
CFEM
CFEM taxes (mineral royalties) on revenue has been assumed consistent with relevant legislation.
The calculation takes 2% of revenue less logistical operating costs associated with the transportation
of finished product.
The tax payable by BAMIN over the life of the Project is summarised in Figure 21.18.
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Figure 2
21.18 – Annual tax paya
able
In line w
with expectations, the income tax (ccomprised off CSLL and IRPJ in Braazil) accountts for the
majority of BAMIN’ss output tax obligation. O Of key significance is th he step channge in this obligation
o
which occcurs from 2031 onwards s. This is ow ing to the ex
xpiry of the SUDENE bennefit which the Project
receivess during the first
f 10 full ye
ears of operaations. Otherr taxes are negligible throoughout the life
l of the
Project.
21.2.1
10.6 Inpu
ut tax obligattion
Input taxxes are thosse payable on the purcha ase of equipment, materials and servvices require ed during
Project sset-up and operations.
o The
T value off these taxes s has been included in tthe cost assu umptions
but idenntified separaately in orde
er to calcula ate tax incen
ntives such asa rebates w where applic cable. All
payable input taxes have been calculated
c in consultation
n with local Brazilian tax aadvisors. Theese have
been pro ovided in the
e form of inpputs to the finnancial model. They are included in the model in nput cost
assumpttions. Regarding sensitivity analysiis and adjus sting the coosts, this haas been done on a
proportioonal basis. This approa ach cannot b be accurate but is deem med to be w within an ac cceptable
tolerancce range. Thee tax cost asssumptions a are thought to
o be conservvative as in re
reality, a proc
curement
strategyy would evolvve to optimisee the tax obliigations whe
erever possibble.
21.2.11 Operation
nal assump
ptions
The Pro
oject team an
nd other connsultants havve developed the Initial CAPEX, Su staining CAP PEX and
OPEX bby undertakin
ng basic, andd some detaailed, enginee
ering studies
s. The follow
wing key assu
umptions
have been made in developing
d th
he BFS finan
ncial model:
21.2.1
11.1 Mine assumptio
ons
All opera
ations, includ
ding at the mine,
m are asssumed to op
perate 360 days a year w
with 5 days stoppage
s
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PdF Project BFS
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for plann
ned annual maintenance
m .
No resid
dual mining asset
a value has
h been reccouped at the
e end of the Project.
P
21.2.1
11.2 Plan
nt and TMF a
assumptions
s
21.2.1
11.3 Railway and sto
ockyard assu
umptions
The fina
ancial model assumes tha
at, in real term
ms, the track
kage tariff is flat at BRL 114.00/t wet railed.
21.2.1
11.4 Porrt assumption
ns
It has be
een assumed
d that the port will be ope
erational all year
y round.
BAMIN deems thatt the port will w constitute e an asset with a commmercial vallue, though none is
considerred in the ecconomic evaluation of the
e Project in th
he BFS.
21.2.1
11.5 Pow
wer assumpt ions
BAMIN w will make a contribution to the set-up p and conne ection costs relating
r to thhe provision of power
to all sites. This is th
he power CA APEX. Howe ever, BAMIN N will not hav
ve any involvvement in the day-to-
day ope eration of thee power gene eration or disstribution cen
ntres and as such will inccur no opera ating cost
relating to this other than via the tariff agreem
ment with CO OELBA.
21.2.1
11.6 Watter assumpti ons
21.3 FINAN
NCIAL RESULT
R TS
This secction outline
es the key results
r from financial an
nd cash flow
w modelling. The viabilitty of the
Project, based upon n the assumptions outlin ed above, hash been tes sted using a range of techniques
and thenn subjected to
t a sensitivitty analysis.
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Table 21
1.2 – Econo
omic evaluattion results
Unit
U Tota
al
NPV 9% d
discount rate (Affter Tax) (USD million) 1,54
42
IRR (Afterr Tax) (%)
( 19.8%
Initial CAP
PEX (USD million) 2,000
0.3
Sustaining
g CAPEX (USD million) 998
8
Average O
OPEX (USD/t dry FOB) 24.8
83
Based oon the assummptions developed by BA MIN in the leead-up to BFS publicationn in August 2016,
2 the
projected cash flowss yield a postt-tax NPV of USD 1.54 million
m and an
n IRR of 19.88%.
The ann
nual CAPEX, OPEX and revenue
r for tthe duration of the life of mine are shoown in Figurre 21.19.
Figure 2
21.19 – LoM
M CAPEX, OP
PEX and rev
venue
The Proj oject demonsstrates good profitability. The early los sses are exp
plained mainnly by the acc
celerated
deprecia ation of fixed
d assets with hin the first 1
12 months of o operations
s and the buuild-up of Ro
oM stock.
The ope erating margin is on average over ha es. Tax has a relatively marginal
alf of total gross revenue
impact o on profit until 2031 whe en the SUD DENE benefit on IRPJ comes c to ann end. Figure 21.20
illustrate
es Project pro
ofitability pre
e-finance.
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Figure 2
21.20 – Proffit and loss
21.3.3 Project ca
ash flows
Figure 221.21 showss the undisc counted free cash flow over the life e of the Proj
oject. The cu umulative
investme ent and subssequent paybback in cash
h flow terms follow
f the sta
andard ‘J-currve’. The cas
sh flow is
characte e Initial CAPEX. Once op
erised by the perations be
egin, expenditure reducess, revenue in ncreases
rapidly, as does cassh flows which remains positive for the rest of the Project liife. Cash breeak-even
occurs inn 2021.
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Figure 2
21.21 – –Und
discounted free cash fllow after tax
x (undiscoun
nted)
Figure 2
21.22 – Disc
counted free
e cash flow a
after tax, at 9% discoun
nt rate
21.3.4 Sensitivity
y analysis
Using th
he base case e results, ana alysis of the key cost, rev venue and macro-econom
m mic assumpttions has
been coonducted in order
o to testt the Projectt’s sensitivity
y to possible
e changes inn these assu
umptions.
The resulting chartss illustrate the likely impa act of chang ges on the key
k financial indicators (N
NPV and
IRR).
NPV
V sensitivity to
t discount ra
ates
Figure 2
21.23 illustrattes the Proje
ect’s sensitivvity to the 9%
% discount ra The red line indicates
ate applied. T
the basee case assu umption. The e point at wh hich the curv t x-axis is the discoun
ve crosses the nt rate at
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Figure 2
21.23 – Postt-tax NPV ve unt rate
ersus discou
NPV
V & IRR sens
sitivity to iron
n ore prices
Figure 2
21.24 depictss NPV and IRRR curves w e Project is aas expected sensitive
with steep grradients. The
to changges in iron ore prices. The chart sshows that with w a 30% rise in pricees, the Projject NPV
doubles. Correspond dingly should
d prices fall b
by 30% the Project
P becommes profit neeutral.
Figure 2
21.24 – Postt-Tax NPV and IRR vers
sus iron ore prices
NPV
V & IRR sens
sitivity to Initia
ial CAPEX
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Figure 2
21.25 – Postt-Tax NPV and IRR vers
sus Initial CA
APEX
NPV
V & IRR Sens
sitivity to Susstaining CAP
PEX
The Prooject is also less sensitiv ve to Sustai ning CAPEX X. With eitheer a rise or ffall in the Sustaining
CAPEX within the ra ange tested, the IRR rem mains within a few perce entage pointss of 20%, se ee Figure
21.26. T
This highlightts that the tim
ming of the e
expenditure has a great impact on thhe level of se ensitivity.
Assuminng a rise andd fall 30%, the NPV resultts in USD 1.445 billion and
d USD 1.63 bbillion respec ctively.
Figure 2
21.26 – Postt-Tax NPV and IRR vers
sus Sustainiing CAPEX
NPV
V & IRR sens
sitivity to ope
erating cost
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Figure 2
21.27 – Postt-Tax NPV and IRR vers
sus OPEX
NPV
V & IRR sens
sitivity to dire
ect variable costs
c
Small ch
hanges in va
ariable costs are likely to occur throug
ghout operations and shoould these chhange by
+/- 10%
% then the coorrespondingg impact on IRR will be e in the regio
on of -/+ 0.55% respectiv
vely. The
b more like -/+ 11%. Fig
change in NPV will be gure 21.28 deescribes the impact of suuch changes
Analysin
ng the labour costs in iso olation showws a marginal sensitivity, as shown inn Figure 21.2 29. Since
labour ra
ates are a re all portion off the OPEX (on average around 10%
elatively sma % including overhead
o
administtrative staff, around 8% for just produ uction staff) the impact is insignificantt.
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Figure 2
21.29 – Postt-Tax NPV and IRR vs. llabour costs
s sensitivity
y
NPV
V & IRR sens
sitivity to exch
change rates
The Projject is expossed to multiple currency ttransactions.. In the main, these are eeither in BRL
L or USD.
There arre only likelyy to be relativ
vely insignificcant costs de
enominated in other currrencies. On this
t basis
the finanncial model assumes
a thaat the Projecct is only expposed to movvements in U USD and BRRL. While
100% off revenues willw be in USD since all ssales will be exported, th he majority oof CAPEX an nd OPEX
will be sustained in BRL.
B Figure 21.30 illustra ates the Project impact off exchange rrate movemeents.
Figure 2
21.30 – Postt-Tax NPV and IRR vs. e
exchange ra
ate sensitivity
Torn
nado analysis
s
Figure 221.31providees a comparison and hig ghlights the most sensitive Project aareas. The Project
P is
most seensitive to the
e iron ore price. Howeveer the tornaddo shows that the Projecct is also pa
articularly
e to a strengthening of th
sensitive he BRL againnst the USD. A relative weakening
w off the USD will provide
a corressponding up pside but as the off-set bar indicate ect is less ssensitive to currency
es the Proje
moveme ents in this direction.
d Th
he Project ecconomic inddicators are less sensitivve to the changes in
BAMIN – P
PdF Project BFS
S, August 2016
781 / 783
Chapte
er 21 – BUSINESS CASE
C
OPEX, a
and least of all
a to change
es in Initial CA
APEX follow
wed by Sustaining CAPEX
X.
Figure 2
21.31 – Project tornado diagram
Table 21
1.3 – Econo
omic evaluattion results
Unit
U To
otal
NPV 9% d
discount rate (Affter Tax) (USD million) 1,5
542
IRR (Afterr Tax) (%)
( 19.8%
Initial CAP
PEX (USD million) 2,00
00.3
Sustaining
g CAPEX (USD million) 99
98
Average O
OPEX (USD/t dry FOB) 24.83
Assumin
ng a discount rate of 9%, the NPV aftter tax is ove
er USD 1.5 billion. The IR
RR is circa 20
0%.
21.4 CONC
CLUSIO
ONS
The eco onomic evaluation and subsequent analysis ha ave found th
hat the PdF F Project delivers an
e return on investment to
attractive t its investo n presented in the BFS, from the
ors. The life of mine plan
Mine Sitte through to the port, is believed
b to b
be realistic with
w material upside
u in seleect areas.
Risks ha
ave been appropriately mitigated
m thro
ough a high level of proje
ect definition , a technically simple
BAMIN – P
PdF Project BFS
S, August 2016
782 / 783
Chapter 21 – BUSINESS CASE
design, and comprehensive Project Execution and Operations Management Plans developed by an
experienced team. BAMIN has developed a risk and opportunities register (see Appendix 21.1 – Risk
Register for BFS) which will regularly be reviewed and updated throughout the Project’s life.
The Project includes a well-defined Mineral Resource; the ability to produce high quality products
attracting price premiums; an advanced stage of licencing and land acquisition, along with positive
engagement with local and government stakeholders; an export logistics solution which includes a
70% built railway line, and a port presenting an opportunity to handle third-party bulk products upon
Project commencement and into the future.
Overall, the completion of technical and economic studies to a feasibility study level that have resulted
in attractive and robust Project economics.
783 / 783