Investor Presentaiton
ROUGH FINANCIALS
Spa*ark Energy_10
Perth-based consultants Rockwater P/L produced a high-level financial model for Lemont using the likely parameters arising from
the Inferred Resource model. It is emphasised these are preliminary assumptions, which will almost certainly be modified
following a test well.
A 26MW plant was chosen as the base case with the intention of incrementally increasing plant size as the resource becomes
better understood. Using the parameters and assumptions given below, the modelling obtained:
LCOE 9.8e/kWh
1,200
IRR
20% / 11%
(with/without LGCs)
NPVs & Capex: 13-104MW
1,000
.
NPV $256M / $64M (with/without LGCs)
NPV with LSCS
Capex
800
NPV_no LSCS
Key Parameters and Assumptions#
•
Base case net productivity of 6.5MW/well
$[000,000s]
600
Capex. $172M for a 26MW (net) plant: drilling costed at $3415/m and
insurance at 15% of basic drilling cost*; surface plant at USD$1500/kW
Opex. Surface: 1% of capex; subsurface: 1.6% of capex; plus staffing
and a State royalty of 2.75%
Revenue. A starting price in 5 years time of $90/MWh (the average
Tasmanian NEM spot price in 3Q18); with & without LGCs (then
$80/MWh). No premium for firming or auxiliary services was assumed
(but is likely to become significant)
A 4 year construction period for 4 production wells and 2 injection
wells plus surface plant, with a management budget of 3.5% of capex
Potential revenue from flow-on activities (Slide 7) not included
Discount factor of 7.5% (IRENA, 2018) and CPI of 2.5%.
# See Rockwater model: SPAARK 18-01 Memo spreadsheet model.xlsx.
*
400
200
Number of Production Wells
0
0
5
T
10
15
20
Rockwater's base case model (highlighted) assumed 4 production wells
and a (fixed) ratio of 1 injection well for every 2 production wells. A
range of NPVs and Capex was obtained by (only) changing the number
of wells; i.e., no allowance was made for economies of scale.
If available, would see cost of drilling returned to investors for an unsuccessful wellView entire presentation