OK then ... well we haven't buit it yet and are not a steady state production realizing FCF of >US$100M+
BUT if we were then the calculation is simple
Mine Life: NWC says 12 years ... I'll knock it down to 10 years Terminal Value ... I'll say $0 because I'm not going to spend any money exploring but we know it has great prospects Discount Rate ... 8% - 12% ... so I'll use 10% FCF ... US$100M+ ....I'll use US$100M flat (I think that's reasonably conservative
The simple math here says this calculates to a bit over US$615M (sum of 10 years of DCF at 10% discount rate)
Lengthening mine line increases value, increasing copper price increases FCF which increases value.
US$600M = ~AUD$900M This number matches up reasonably well to rough RoT EV/FCF of 6X
Well I can not 10X share price being offered. There is still construction risk and then execution risk.
60% of that being ~US$360M or AUD$540M or about AUD$0.18 (using 3B shares as fully diluted)
That strikes me as a ridiculous premium ... but then AUD$0.06 strikes mean as a ridiculous discount to what its worth.
Net Net ... got no idea as to how this would be valued for a takeout.
Change of control that is selling 51% also strikes me as ridiculous - as you essentially give away any future control premium.
Going to be an interesting "wait and see"
Good fortune to us hopefully.
NWC Price at posting:
2.8¢ Sentiment: Hold Disclosure: Held
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