The Mourilyan port – which QBL’s bauxite deposit lies just 15-24 kilometres from - has current capacity for 800,000 tonnes per annum.
Even this initial 800,000 tonnes per annum would provide gross annual revenue to QBL of $44 million.
On 800,000tpa, after shipping costs to China, QBL would be left with an operating profit of around $14 million.
At 1 million tonnes per annum, it would increase to $18 million.
How would the market like that based on QBL’s current enterprise value of just $11 million!
But you can see the potential is there for QBL to become Fortescue-esque.
QBL has a market cap of $15 million, with $4 million of that accounted for by cash Vs Australian Bauxite (ASX:ABX) is capitalised at around $40 million, with cash of $2 million.
QBL is only 15-24km from the Mourilyan Port… compared to ABX at 130km.
QBL bauxite looks to have areas of low reactive silica making it attractive for refining…
Based on the market cap of ABX, which is not overvalued by any stretch of the imagination, our immediate “fair valuation” of QBL is around 10-12c per share, or 4X present trading prices.
And in fact this is underplaying the situation… all metrics now suggest that QBL should attract a loftier valuation than ABX
