Again really hate repeating myself, but highlighting reasons why POSCO wanted to speed up their signing of the definitive contracts via an earlier board meeting
Re-posting from my earlier post for those interested in fundamentals like Matt Bohlsen's article https://seekingalpha.com/article/41...project-de-risked-huge-cash-sale-posco?page=5
The below are my own quick calculations
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Just doing a comparison between SDV's current and future value using numbers provided in the announcements, for people interested in the fundamentals
Current valuation for SDV on a per share basis:
*POSCO paying USD280m for 1.58Mt of LCE resource (Measured and Indicated), so the total M&I of 5.67Mt LCE before the sale of Northern tenements gives a total price of USD1005m
Which is circa A$3.23 per share today.
Future valuation for SDV at 25kpta LCE production gives circa A$11.30 (SDV on a standalone basis).
Project partner is now not needed after POSCO plus an additional year of Mt Cattlin cash flow
Column 1
Column 2
1
SDV at 25ktpa
2
EV/EBITDA
13
3
EBITDA USD (m)
270**
4
Partner not needed
270
5
EBITDA AUD (m)
360.00
6
Enterprise Value AUD (m)
4680.00
7
Target Market Cap AUD (m)
4760.00
8
Target Price per share attributable to SDV
11.33
As usual please do not take any of the above as any form of advice. But one can see that there is some nice growth in valuation for SDV over the next few years based on these simple calculations. Mt Cattlin and James Bay were left out of the calculations.
Cheers
Tuna
*See company announcements for POSCO on 29th May 2018
**and updated DFS released 15th May 2018
GXY Price at posting:
$2.78 Sentiment: Buy Disclosure: Held
