Pinned straw:
Discl: Held 1.18% IRL
VYS provided an update on the Kariyarra Water Scheme progress to the market yesterday. This pushed me to deep dive the Karriyarra Water Scheme opportunity a bit more, going back to the original 13 May 2024 announcement, and then all the updates announced, since.
VYS has positioned itself almost perfectly for this opportunity.
If this is the first of many similar water asset targets, then VYS could be well on its way to become a significantly bigger company with highly reliable recurring revenue stepping up each time it brings one of these water assets onstream across the country. It certainly has the best, and probably only, end-to-end stack of water-related capabilities to enable this. This is extremely exciting!
This was a really good reminder that not all growth opportunities need come from "AI-margeddon." ... I topped up another 0.5% yesterday and VYS was the only green holding in my battered portfolio today ....
WHY THIS IS SIGNIFICANT
The current water supply of Port Hedland in far NW WA is at effective capacity.
WA Govt planning for additional water supply is not likely to be delivered until the 2030’s - this is a massive issue as water shortages will constrain significant and planned economic development in the PHE region https://www.abc.net.au/news/2026-01-23/port-hedland-water-carting-pilbara-supply-shortage/106258122
VYS, via its Asset management arm, Vysarn Asset Management (VAM), have signed a Joint Resource Agreement (JRA) with the Karriyarra Aboriginal Corporation, to be equal partners to develop a newly identified water source to supply customers in the PHE region since 13 May 2024
Since May 2024, the VAM-KAC JRA has done a lot of water-related studies on the Karriyarra Water Scheme (KWS), using VYS end-to-end water specialised capabilities and technologies and have established (1) encouraging geology (2) well development water volumes (3) with the water quality suitable for direct industrial bulk supply and (4) likely to be suitable for bulk potable water supply subject to minor treatment
The KWS promximity to Porth Hedland, and the promising findings of the water studies allows the VAM-KAC to position the KWS to be the only viable near-term solution to meet water demand in Port Hedland
At 10GL (10,000,000kL) per year capacity and the Port Hedland class 2 bulk water price of $4.20 per kL, this translates, back-of-envelope, to:
- Potential JV revenue of $42m per anum
- VYS’ JV revenue share at 50% = $21m per annum, recurring, from 2028 for a term greater than 10 years
- This is a material ~20% uplift to VYS’s FY25 revenue of ~$106m
- Required investment capex = $250m, assuming VYS’s share is 50% translates to $125m, implying a ~6 years ROI
The more I understand VYS’ history and the Karriyarra Joint Resource Agreement, the more impressed and convinced I am that VYS is really in a great place to capitalise on the Port Hedland water issue, and other similar water supply issues it has identified. It does feel like VYS has had this Port Hedland opportunity as the “end-in-mind” water assets that it wants to own as it strategy, then evolved VYS over the years to be in this precise position.
SUMMARY OF EVENTS
- VAM entered into a Joint Resource Agreement with Kariyarra Aboriginal Corporation RNTBC (KAC) to be equal partners in establishing and operating an exclusive and legally binding JV for the purpose of investigating, assessing, managing, owning, controlling, extracting and selling sustainable quantities of water from identified and secured water resources on Kariyarra country
- KAC is the registered native title body corporate that hold native title on trust for the Kariyarra Traditional Owners and the traditional cultural interests in all water resources on Kariyarra country
- VAM will also be appointed the JV manager and marketer of all sustainable quantities of water that the JV secures and develops on Kariyarra country
PRESENTATION SLIDES ON THE KARRIYARRA WATER SCHEME
Investor Presentation 2 Aug 2024
Investor Presentation 7 Mar 2025
Investor Presentation 28 July 2025
FY25 AGM Investor Presentation 27 Nov 2025
Appreciate you taking the time to do this @jcmleng
That JV and the Kariyarra Water Scheme have been on my to do list to look into, so your explainer is a very useful headstart.
Vysarn has been my 3rd biggest winner (in dollar terms, if not %), behind SKS Tech. and Smart Parking. Management has impressed from the perspective of being very clear on their vision for what the company was going to be, as opposed to what it was at the time. @Wini and I met with management back in early 2023 and I think I mentioned to him afterwards that it's interesting that a pretty dour Collingwood Premiership full back then morphed into such an ambitious resource (adjacent) company CEO. James was impressive back then and even more so now that further runs have been put on the board.
Shoutout to @laoshi too, who was early to the story and posted about it frequently.
Thanks for the post @jcmleng
I haven't had time to post anything on Vysarn but yesterdays update on the water project was very welcome and I think the valuation of the company has now caught up with this news
Glad I'm still here and growing more comfortable with my largest holding although still feeling a bit of indigestion from it sometimes when it moves down a few percent!
I think @Wini first posted something on Vysarn as well as a few others on X and HC which got me interested so wini deserves some credit.
Never thought I would still be here since my initial purchase at 17c!