Originally posted by ShanghaiBobby
I agree with your assessment completely, it's a reasonable price to pay, but soon the EV will be through the roof because of nifty burning through cash. What happens after that?
They can sell nifty or shut it down if they can't turn it around. Then you're left with Renison, which as I have shown above appears to justify at least the current SP. Am I being too simplistic? I assume there are some costs associated with a mine in caretaker mode, but I would have thought it had at least a nil value rather than a negative value.
That's why downside for me is you're left with just Renison, currently valued on a what 6.6x multiple!? Any turnaround at Nifty or even a sale is just a bonus. Also remember they seem to have well advanced plans to expand Renison with the tailings project, which sounds pretty valuable based on the feasibilities.
Am I missing something? The only thing I keep checking (to make sure I've not screwed something up) is that the $8 million per quarter is MLX's 50% share... that is, the actual EBITDA of Renison 100% is $16 million. If I'm wrong there, then I take back everything!
(20min delay)