Shorters... Good luck!, page-730

At current market price either the market is assuming that either POSCO transaction will not materialize or its existing operation at Mt Cattlin and James Bay is worthless and discounting SDV heavily. Let's look at how the market is currently valuating GXY:

Number of Outstanding Shares= 407 million
Market Price AUD 2.73
Market Cap AUD 1.1 billion
Less: Cash on Hand =AUD 100million
Less: Cash from POSCO = AUD 380 million
Market Cap Less Cash= AUD 620 million
@1AUD=0.7285USD means Market Valuation for Galaxy Mt. Cattlin + SDV + James Bay = US$ 450 million

ValuatIon from operatIons and feasibility if SDV:
Mt. Cattlin is currently producIng AUD100 mIllIon in cash every year and will keep on producIng for the next 10 years. In additIon the addItIonal equIpment beIng installed will Improve the recovery and boost profIt by AUD40 mIllIon. The discounted valuatIon is AUD 1 billIon.

The feasIbility study estimated SDV valuatIon to have an NPV of US$1.43 billIon or AUD 2 billIon @ 8% discount rate.

The above gIves us an estImated value of GXY at AUD 3 billion (excludIng James Bay) or AUD 7.37 per Share.


ComparIson of the two approaches show how undervalued the stock prIce of GXY is relatIve to its intrinsIc value. A potential upside of +170% on your capItal.