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Cadiz Inc. Message Board

  • xds58 xds58 Nov 29, 2012 11:11 AM Flag

    valuation update

    With debt now at over $60mil, Mkt Cap at $130 (excluding convert), and another $10mil to $15 mil likely costs to get to ground breaking, assuming best case, plus $250mil or so build cost, CDZI looking to have, best case, about a $450 mil EV at completion. $1,000 acre/ft, 50K acre/ft, puts current valuation at 9x EV / REV -- just for reference, a well run, profitable water utility like AWK trades at 4x current EV / REV

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    • Xds58:

      Two key issues to consider; total real cost and time.

      The Cadiz gang want to build a small power station ( about 8,000 kW to 9,000 kW for the 50,000 ACY version ). Problem is - they will have to apply for an emissions permit, which will take at least 18 months to get - but then they will have to deal with the various objectors like the Sierra Club etc. Then, the NOx and CO emissions that they claim in their EIR are way too low for a 8,000 kW power station.

      The other option is to buy the power from SCE - but there are no power lines for that kind of load to the project. That will cost at least $ 50 million - AND - then SCE will have to get whatever permits to run the power lines, which will take at least 3 years.

      Bottom line; this project will not have any water flowing for a minimum of 3 years from now. Given their current cash burn rate of $ 15 million per year, Brackpool will need to find another $ 45 million, which then needs to be added to the current $ 60 million, which will then mean that the project revenues will have to cover the accumulated development costs of $ 105 million plus - AND - most likely total construction costs of $ 500 million for the SCE power lines plus the treatment of chromium 6 to meet MWD requirements.

      Sentiment: Strong Sell

6.85+0.10(+1.48%)Jul 28 3:59 PMEDT