I have struggled with the second half year contract completion expectation for the Chinese deal when only a few weeks of remaining work was highlighted earlier in the June announcement. I am optimistic that the deal is a goer from the posts highlighting the action on the ground in China that have been verified.
I still think the greatest asset (although non cash flow generating) is the Adani royalty. The Royalty is worth $1b+ unrisked (note that it is fixed, indexed and not subject to coal price movements). If you value 40mt of average production over 20 years that adds up to $1.6b in today's money. What makes it even more attractive is the cost of the revenue stream. One person could project manage the royalty stream and take the cheques to the bank every month with time to stop at the Pub for a beer. Someone wrote that this $1.6b income stream has got to be worth $60m. I would say that it has got to be worth $500m+ even today. The sonner this revenue stream becomes tangible the sooner the share price will reflect this value.
The Corporate advisors seem to indicate that the Costello connection is potentially going to be used for the FIRB part of the GCL deal.
The Qly Report is timely. Am unhappy about the current share price but still see some good value in the total assets held.
LNC Price at posting:
53.0¢ Sentiment: Hold Disclosure: Held
