new ady valuation confirms 150m first target, page-2

No comments ah?

I think it may get lonely in here for the next couple of months as the excitement dies down. Well I'm still excited, so I'm gonna single handedly maintain the LOVE for this OREsome stock. Turn away now in unashamed romance and ramping offends.

That H&C report was an absolute beauty. The best researched ADY or lithium write-up I've seen, delving deeply into the industry and company specific factors effecting Rincon's future development and potential. My major point of dissagreement would be in the current perception of the company and valuation split between IO and Rincon in the share price. Personally I think more people are in for the lithium than IO but time and the split will tell.

In summary, they guessed at half the current valuation would go to Rincon meaning roughly a market cap of $150M on split (13c now or 52c post crunch). Still to be finalised for the fledgling RLL is financing for and to build/commission the ponds and plant. This is not without dilution risk given ADY's history with these things but they assume raising another $50M equity without guessing at what price.

Now if RLL go $150M on split without finance in place ORE will go $120M post JORC is my call ($2). That is because when RLL finance and commission in another 12 month time H&C have a target price of $1.50 for a market cap circa $500M (depending on cap raising). The 24 month target is $2.50 when production and sales are proven based on about a EBITDA P/E of about 10 and market cap $800M (again depending on cap raising).

Does anyone else see significance of this valuation and the clear relationship to ORE? The RLL market cap will drag us along for a free ride sure as night follows day! It's an ARBITRAGE play which is the most beatuiful word in the financial world; meaning to buy and sell the same asset in different markets at different prices for a risk free profit! We are comparing apples with apples here and this report can be re-issued in 9 months time with ORE replacing ADY in the text.

There are enough people in the world who believe in the lithium story who want a peice of the ONLY two small cap pure lithium plays to pay up FULL VALUATION pending the coming Lithium hybrid battery boom. They will buy ADY post commissioning at 52c to get set for the post commissioning $1.50, and insto's will buy at $1.50 to get set for the $2.50 re-rating with production and sales clarity, who will be bought out by the funds and masses looking for exposure at $2.50 for when hybrid batteries take off sending the stock to $5! Each buyer will be comfortable with their place in the chain and take their profits as fit.

It is the same as the RWD or MAK stories. Spec and savy punters get in at 20c, DYOR and buy up to 80c for JORC which gets the insto's on board and research reports out sending the shares to $2 where a new crowd of long term holders get set ready for development and production valuation of $5 (their still waiting...lol). It is not fantasy stuff, it happens to those special stocks all the time, especially with tight capital structures that guarentee low dilution.

I hate banging on about the same thing but ORE will follow the lead of RLL because it is a arbitarge with transparent PEER valuation metrics that analysts love because it is easy, they are usually lazy and not very bright, and no-one loses their job getting a valuation horribly wrong. Ore will follow one step behind the market cap rise of ADY as long as we tick the boxes along the way.

Do I hear a chant of MORE ORE going up.........;)

Goodluck