CTEQF - Reflections On Nemaska's Bombshell
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What Happened
Nemaska Lithium (NMX.TO; NMKEF) dropped a bombshell a couple days ago when they announced they will need another $285 million of financing to bring Whabouchi into production. This was a 47% increase over the project's original direct upfront capital costs of $605 million as outlined in the 2018 feasibility study. This was simply a huge miss.
Issues like this are another reason why I like to use higher discount rates in my net present value project estimates. It helps provide an additional cushion for unexpected outcomes.