Natural Resources
26 July 2022
Comment
In Choppy Waters for Equities, it’s ‘Steady as She Goes’ at Chrysos.
Chrysos Corporation*, the recently ASX listed Photon Assay company co-founded by RFC Ambrian and CSIRO, released its Q4 activities report this morning, the first since listing.
The numbers released reflect the accelerating global demand for Chrysos’ kit and the ongoing success the company is enjoying. In-fact revenue came in almost 4% above the forecast set out in the May Prospectus and points the way to the company continuing to at least deliver on the expectations set out at the time of listing.
Quarterly Revenue - Sustained Quarter on Quarter growth (Source: Chrysos Corporation)
Revenue for the quarter at A$4.7m was +236% YoY, and the total for the year at $14.2m was up +216%. The two main top line drivers - the number of units deployed and the utilisation rates of those units - are both performing well.
- The company now has 11 units deployed, two in the quarter and one after the period close, processing more than 651,000 samples during the qtr, +84% YoY
- deployed utilisation rate increased to 64% up from 59% in Q4 2021.
- Additionally, having secured a secondary supplier of customer sample jars, Chrysos benefitted from sales of these non-discretionary, consumable items.
Unit Utilisation and Samples Processed (Source: Chrysos Corporation)
Five new lease agreements were signed in the quarter, bringing the total contracted and deployed units to 38, and taking Total Contract Value to A$558.5m, +430% YoY. The new leases included two new customers, Britannia Life Sciences and Alfred Knight Laboratories as well as further machines with existing customer, Intertek. It is interesting to note that Alfred Knight’s services are often used as an umpire laboratory within the industry which underlines Chrysos’ ability to deliver faster, safer and more accurate gold analysis.
Chrysos’s PhotonAssay technology delivers faster, safer, and more accurate analysis of gold, silver, and complementary elements by non-destructive measurement of larger and more representative samples in as little as two minutes, enabling rapid turnaround of critical operational information that drives optimization throughout the mining value chain.
The system provides an environmentally friendly, chemical-free, more sustainable replacement for traditional fire assay methods. PhotonAssay reduces CO2 emissions by 0.455kg and 0.31kg of hazardous waste per sample when compared to fire assay, treading more lightly on the planet and improving operational health and safety.
The Chrysos business model is highly scalable. It leases the PhotonAssay units to mines and laboratories on long-term renewable contracts of 3+3 years or 5+5. The contracts are structured around minimum monthly ‘take or pay’ payments, providing Chrysos with clearly visible, long-life annuity income and encourage high usage by customers which drives the capacity utilisation higher – as can be seen by these results.
PhotonAssay is embedded is the customers production chain and is fast becoming critical infrastructure which, again, translates into sticky revenue for Chrysos.
Chrysos’s market debut wasn’t very auspicious, but these results show that in the current market perhaps “Steady as She Goes” should be getting a lot more attention than it currently is.
*RFC Ambrian and its members hold a substantial interest in the company.
Charlie Cryer
Head RFC Ambrian London
+44 (0)20 3440 6834
charlie.cryer@rfcambrian.com