joining the dots, page-64

Just a warning posters there seems to be a lot of hype on the Silica deal and fair enough so however don't get confused between in ground value and EBITDA multiples.

The wiser ones amongst us might remember Compass Resources - inground value of a hundred billion dollars with a cap rate of about $500M - went under two years ago. You need to take into account costs of recovery and accurate DCFs with capex requirements.

Valuing on an EBITDA multiple then you just need to look across at the IO stocks - the IO stocks coming into production < 12 months are trading on multiples of 2-3,2-4 years out multiples of one. Funding of course is what investors see as a mitigating factor and the uncertainty of IO prices in years to come.

So crack out your DCFs and do your EBITDA multiples and you will come out with a more conservative figure.
Even in full production some of the larger mining companies are trading only on EBITDas of 6-7.

THAT'S MINING -


Now salt slag this is an entirely diffrent prospect -
Again look at MHMs peers,similar industries,long term earnings - once in production PE ratios of 14-18 are realistic or EBITDA multiples of 10-14.


Spozzie