Dixie
I just try look at things with a timeline in mind....then work it back to todays events to see when is the best time to buy, if at all.
So a few hypotheticals here but hey just having a crack at it....
First revenue generation for TON? Say 2017
Cost to get there? Say $100m (give or take)
if you are to buy for the long term (or see it through) , in other words, want to be around when TON makes their first dollar, or profitable year, then work it back to now to work out what it is worth today and could be worth in 6 months, 1 year, 2 years, 3 years, 4 years.
I will use very loose figures here...
TON need say $100m to get to point B (production) in next 2 years.
Let's just say revenue from the first year is 33,000T as suggested last report at say $900T (got to be conservative on revenue), this is where mistakes are made.
= $30m revenue year 1
Costs say $350T, actually say $500T and that includes some interest payments etc on part of the $100m
So profit is 30-16 = $14m
PE of 20 I put valuation of the company at $280m for income and say $100m for plant/infrastructure.
Then I'd use the $14m x 20 years to get the possible true valuation if sold (now its proven)
$280 + 280 + 100 = $660m (est valuation)
Less debt of say $100m
So valuation at end of 2017 is $560m
Now, Lets say they need to raise $50m only of the $100m, as JV partner comes in.
This could happen in say the next 12 months.
So lets say it does and the SP is halved, or better way to put it, there are 50% more shares to get to that point as 50m is raided on market in one way or another.
I think shares are 300m at present, havent checked, close to that from memory.
Lets then assume we have 450m shares in next 12 months.
Remember in 2017 valuation may be $560m.
Thats about 80c share using the 450m share figure.
So on that basis, i think the share price shouldn't be any more than 80c in 2017.
2014 - 29c
2015 - 50c (even with dilution of 50% more shares, the JV anns will re-rate the company imo)
2016 - 60c
2017 - 80c
2018 - ??
In 2018 it may be 100,000T at $900T
Costs lower to $400T
Revenue 490m
Costs $40m
Profit $50m x PE 20 = $1bn
$1bn income valuation + (valuation for sale @ $50m x 20 years ) = $1bln
So valuation = $2bln
Say another 100m shares have been thrown out there during this period too
So we have $2bln valuation with 550m shares
share price say $3.60
2014 - 29c
2015 - 50c
2016 - 60c
2017 - 80c
2018 - $3.60
2019 - $7.20 (assuming they can get to 200,000T p.a)
So what have I worked out really?
IF and its a big IF they get to production, then I make more ROI in 12 months (between 2017 and 2018) then buying in 2014 and holding for 3 years.
But more importantly, I don't get diluted, and only need to buy once project is running, (much lower risk.)
Anyway, back to my scotch for now.
Just one way to look at it I guess.
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