Magalies Quarry Business Plan — Scenario and Sensitivity Analysis
What moves the outcome: volume, realised price, haulage distance and plant availability, with scenarios.
Section 21 of 26
Scenario and Sensitivity Analysis
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- 1. Executive Summary
- 2. Investment Thesis
- 3. Company and Business Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Industry Analysis
- 6. Market Analysis
- 7. Competitive Landscape
- 8. Products and Services
- 9. Business Model and Operating Model
- 10. Go-to-Market and Commercial Strategy
- 11. Management and Organisation
- 12. Regulatory, Licensing and Fiscal Framework
- 13. ESG, Rehabilitation and Community Impact
- 14. Strategic Plan
- 15. SWOT and Strategic Implications
- 16. Risk Analysis
- 17. Implementation Roadmap
- 18. Financial Plan and Projections
- 19. Funding Requirement and Structure
- 20. Investment Case, Valuation and Returns
- 21. Scenario and Sensitivity Analysis
- 22. KPIs and Management Dashboard
- 23. Conclusion and Recommendation
- A. Appendix A: Projected Income Statement
- B. Appendix B: Projected Balance Sheet
- C. Appendix C: Projected Cash Flow
The base case rewards equity; the downside impairs it. Both are shown, because an investment committee needs the full distribution, not just the mean.
Scenarios
|
Scenario |
Y5 EBITDA |
Y5 margin |
Min cash |
Exit equity |
Equity IRR |
|
|---|---|---|---|---|---|---|
|
Downside |
R21.8m |
19% |
R-70.8m |
R-29.8m |
n/a |
|
|
Base |
R49.5m |
32% |
R6.0m |
R220.8m |
23% |
|
|
Upside |
R61.2m |
37% |
R6.0m |
R336.7m |
38% |
|
|
Downside disclosure In the sustained downside (volume ~15% lower, prices ~7% lower, costs ~6% higher), Year-5 EBITDA falls to R21.8m, the R45m revolver is fully drawn and a further liquidity shortfall of roughly R71m emerges, and exit equity turns negative at R-29.8m. The investment therefore requires shareholders able to provide a standby equity cure. This is the single most important caveat in the memorandum and is stated plainly rather than smoothed away. |
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Sensitivity
Exit equity is most sensitive to selling price, then volume, with operating cost a secondary driver. A 10% price decline roughly halves exit equity, underscoring that disciplined, delivered-cost-based pricing is the key value lever.
Break-even
Cash break-even is around 431 kt and full-cost break-even (including depreciation and finance cost) around 604 kt, reached by about Year 3. The margin of safety is thin at Year 3 and widens materially as volumes rise toward nameplate.