umc thx valuations reverse to

Quick back of envelope calc's suggest that on today’s closing prices THXO actually equal or better leverage into UMC than UMC stock as UMC rises - WITHOUT any other growth in THX assets whatsoever!

Allowing for the following:

THX current Mkt Cap: 40M (comprising 112M shares - undiluted)

Of which $24.5M is UMC (20.4M UMC shares) and $8.2 cash
Ignore ROY and Aldershot holdings that cancel out corporate etc

Leaving less than $8m for Copernicus, other base M's, U etc.

A 66% increase in UMC (to the magical $2) should re-rate THX to 50cps (allowing again just $8M for everything other than cash and UMC holding)

Hence 67% increase in UMC proportionately returns a 72% increase in THXO.

UMC @ $3 equates to THX at app 69cps and THXO at 50cps (again allowing just $8m for everything other than UMC and cash):

Therefore UMC increases 150%, while THXO increases 170%

UMC @$4 sees UMC increasing 233%, THXO increasing 269%
UMC @$5 sees UMC increasing 316%, THXO increasing 366%

While this may seem little by way of risk/reward remember all this assumes that THX assets - other than their UMC stake and their CURRENT cash STAY valued at just $8m.

And there's the rub... Copernicus is just 3 months from production with V little Tech or commissioning risk (SMY JV partner) plus THX have a whole lot of upside at Sophie Downs, Lamboo, Mabel hill, all the U tenements etc, etc. Then if you throw in ROY and ALD etc.


Assumptions:
Future THX raisings are v limited with Copernicus generating cash and the UMC/ROY holdings effective cash equivalents as well.

And yes the $8m in cash currently on the books won’t last -$5m is earmarked for Copernicus… BUT that in itself will generate commensurate and immediate revenue by way of toll treating of Copernicus ore by SMY so effectively NO capital plant requirement. This revenue will be worth more than the $5m that needs to be expended on Copernicus by THX.

The listed/unlisted THX Oppies (26.8m) also don’t overly affect this as they're either (Very) long dated or the strike prices are proportionately well above current SP.

Most importantly this also assumes NO Takeover premium in the THX SP whatsoever, NOR does it account for the likely U spin-off.

And worst case assuming the unthinkable, from a risk perspective UMC at say 50cps again for whatever totally improbable reason wouldn’t see THXO much lower than its long term lows around 15c if only because of the pending Ni production from Copernicus.

Yep its rough and ready but this is something I've tracked on and off for some time and this ratio is now at its widest. As this ratio has increased so has my suspicion there is something to the rumors re THX.

Additionally is this also keeping THX down as some seek to gather THX/THXO’s as the impatient sell out.

Finally no correspondence entered into... I've had 3 bungies.. oops bundies already.

DYOR