Share Price Potential, page-19

You cannot combine the both together to form the valuation as 1 is close to fair valuation (AMAL) where the other is under value (Alliance). Also Tawana has many more projects.

Also market cap is just a rough guide. Look at below calculation

Production

- Spodumene Concentrate = 120,000 to 160,000 tonnes per annum (average 140,000)

- Tantalum Pentoxide = 300,000 pounds per annum

Before processing, these ores are worth

- Spodumene Concentrate = US$900 per ton

- Tantalum Pentoxide = US$60 per pound

Total worth per annum (before accounting for operating costs)

- Spodumene Concentrate = US$900 per ton x 140,000 = US$126,000,000

- Tantalum Pentoxide = US$60 per pound x 300,000 = US$18,000,000

Total worth per annum (after accounting for operating costs)

- Spodumene Concentrate = (US$900 &ndash US$250 per ton) x 140,000 = US$91,000,000

- Tantalum Pentoxide = (US$60 &ndash US$30 per pound) x 300,000 = US$9,000,000

The infrastructure is mostly in place or funded by Tawana Resources, so Alliance shouldn&rsquo t incur too much of a cost here.

Total operating profit per year about US$100,000,000 or S$140,000,000

Alliance Mineral 50% share in Joint Venture = $70,000,000

Additional expenses for Alliance Mineral assuming $5,000,000 (tax, administrative etc)

Net Profit = $65,000,000

Assuming a 8x P/E ratio, same as Galaxy Resources = Market cap to be about $520,000,000

Target Price = $520,000,000 / 480,000,000 shares = $1.08 per share.

If profit is 70m or lets just say 40m. What is the PE ?
TAW 100M market cap / 40M profit ? = P/E of 2.5?

Simple calculation P/E of 5 will bring your market cap of 200m which resulted a share price of more than 45c