Ann: KIS Raises $5.6M in Strongly Supported Placement, page-40

Ok now lets take a fundamental look at what this company can be worth.

The first simple way to value this is use the current independent expert's valuations from their DFS from last year. They gave this company a current NPV of AUD 241 million. Right now the current market cap is AUD 88 million. - so the share price can still almost triple from here to reflect fair value. A double and it's still undervalued. So buying it here, given we now know it will get its financing and get into operation is a no brainer.


I will do a more detailed valuation below, but first let me say KIS obviously did this recent CR now for two reasons:
1. Is to get a truly powerful and influential cornerstone investor aboard.
2, is to wipe its AUD 4.7 mill debt - which to me is clearly in preparation for finalising and announcing the new bigger commercial debt to fund the mine- There is no doubt now they will get debt financed from banks and govt.

So what was the 4.7 mill debt for? if You've seen the pics of the mine with the port nearby it and a golf course in between? KIS borrowed the money to buy the golf course because
1 They are very confident there's good tungsten there too.
2, so they can get unfettered access to the port on their own land,
3. so they can build their new plant there near the port and mine.

Right now KIS had projected a 14 year LOM (life of mine) By doing some Jorc drilling on the new land, we're confident, and believe they are too - (but under ASX rules they officially can't make forward -ooking statements) that they can greatly increase their reserves and hence their NPV and LOM increase - Which means it can go onto a bigger PE calc too.

Right now KIS has 327 mill shares on issue
- there are also 36 million options which will all convert (giving the co AUD 3.6 mill more cash)
-28 million more shares were issued today.
If they raise say AUD 8 mill more equity before production starts? they can do at 40 cents after debt financing is announced?. So that's 20 mill more shares. So fully diluted, there should be around 411 mill shares out? agreed?.

Calculating profitability of APT is complicated - we reckon the company should be making NPAT of around AUD 25 mill a year - using current apt prices.

Put that on a 10x pe -and we get a similar AUD 250 mill valuation as the independent experts.

A 250 mill mkt cap valuation divided by 411 mill shares = 60 cents a share.

But IMO that doesn't include a lot of positives

1. Given its rarity- and that The LOM can probably be extended to 25 years -so this stock can sit on a 15x pe =90 cents a share.

2. Also the tungsten price is going to rise- We believe that post covid there will be greater demand and a faster rise in the price of APT back to its highs of USD 420 per kg (now its 280) this can allow fo another 30% rise in the value of this mine, This can put the share over 1$.

So with little real downside, still a big potential upside and a high potential divided yield - this share is a great buy here or all the way to 45 cents!

Caveat :the above figures are from my own calculations only based on others facts. I also declare I am long this stock, so before you buy DYOR please!