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05 October 2019 | Corporate

Port infrastructure investment opportunity

Free Eyre Limited, a company of over 400 grain farmers on the Eyre Peninsula is raising capital to finalise the pre-build requirements and licensing needs of the Peninusla Port on the Eyre Peninsula. Baker Young is supporting this capital raising through the farmers, the people on Eyre Peninsula and South Australians.

Key Metrics: when charging $44.50 per tonne, a 16% discount to the current costs on Eyre Peninsula, this port is expected to have an Earnings Before Interest, Tax and Depreciation (EBITDA) of $24.9m and a Net Profit After Tax (NPAT) of $18.5m on a capital base of 40m shares.

  • The Opportunity is to fund a new build deep-sea port on the Eyre Peninsula, South Australia known as “Port Spencer”.
  • Approximately 1.5m tonnes of grain has a freight advantage to Port Spencer (owned by Peninsular Ports.
    It provides competition and improves grain supply-chain.
  • Grain grower benefits with supply-chain savings.
  • Re-introduce grower ownership and control of critical grain supply infrastructure.
  • Enterprise Value estimated on completion of build to be in the range of $160 million to $200 million.
  • Construction will leverage innovative jetty design technology which has been used in Australia previously.
  • Targeting up to 1,000,000 tonnes grain throughput per annum.
  • Grain/canola-capable port. Conservatively forecasted returns based on grain throughput only. Revenue from handling other sources is anticipated but is not included in the financial model for conservatism.
  • Port Spencer previously approved by SA government (Centrex Metals Ltd project), with Major Project Status.
  • Current planning and approvals stage – the aim is for the build to be ready for the 2021/22 harvest.
  • Competitors port is becoming a freight risk as the only access is through the town by truck (ABC News Rural reported ‘…around 30,000 extra truck movements will take the place of the current rail grain haulage on the Eyre Peninsula,’ on 31/05/2019).

For more interest please email Matthew Baker for a copy of the Term Sheet