opinion & simple valuation - mtn.

Afternoon all.
Thanks to Stolwyk & all others for responding & sharing their opinions & time yesterday.
A 'pessimistic' value & justification for those interested. Take it or leave it. It is speculative fundamentalism that will either be right or wrong, I am no specialist in U values, at the very least, the market will 'teach' me.
: )


Determining value.
MTN.
There are 32.5m shares on issue + 5m shares escrowed, for the sake of simplistic calcs, call it 38m total.

To consider;
-JORC compliant U308 resource of 33,200 tonnes, (73.192m lb).
-Drilling program to begin by month's end, high probability of significant upgrades.
-S.A. location, legislative/political importance.
-Proximity to infrastructure, eg Beverly mine 3km away.
-Cash $3.7m + highly leveraged capital structure.
-Prospectivity of U tenements + rare earth value to be left aside for the time being.


Simplistic Pessimistic Valuation #1.
Enterprise value = AU$1.00 per JORC lb of U308.
73.192mlbs X AU$1 = AU$73.19m.
EV + cash, (AU$3.7m) = AU$76.89m.
AU$76.89m divided by 38m shares equals AU$2.02fpo.

Therefore, (totally) pessimistic value = $2.02 per fpo.


Commentary.
A lot of members profess that they got PDN right, holding it all the way through, some even from 1.4c!
I for one didn't, I sat back in awe as the Canadian money flowed in 'teaching' myself & many others the value the market was/is prepared to pay for that company.
I don't even agree with the long term fundamentals of the Uranium market, I personally think that any supply 'short-falls' will be met through technologies improving the energy utilisation & waste refinition but then, I am a lay person that has not spent much time self-educating myself in this sector & as an investor/trader, I'll not swim against the tide, simply as a small small fish, follow the big ones.
: )


Justification.
Generally speaking, market mechanics operate similiar to a 'paradigm paralisys'.
When something occurs that is 'outside the box', the market will either appreciate/negate values so that it can then fit inside the box ... or if that is not possible, change the structure of the box itself, (in this hypothetical illustration I am relating to the sector) so that all things once again are contained within.

Examples of sector EV values per lb U308 below.
These are very base comparisons, please understand that they are not allowing for many obvious variables, (eg- disallowance of all other mineral values/assets, company debt, geography, time to market, etc).
The is for snapshot simplistic value illustration purposes only.
The formula I have used is simply;
Company/company shares on issue (as of last quarterly) multiplied by (highest 6mth intraday) price per fpo to arrive at (undiluted) market capitilisation minus cash (as of last quarterly) divided by JORC compliant U308 resource to therefore identify (base) enterprise value per lb.

*MTN
EV = $0.42 per lb U308.
(S.A. Aus.) 37.8m fpo multiplied by $0.915 equals $34.58m market capitalisation minus $3.76m cash divided by 73mlb U308 equals enterprise value of $0.42 per JORC compliant lb of U308.


*PDN
EV = $7.16 per lb U308.
(Africa) 400.8m fpo multiplied by $1.815 equals $727.45m market capitalisation minus $39.49m cash divided by 96mlb U308 equals enterprise value of $7.16 per JORC compliant lb of U308.
PDN EV application to MTN would equate to MTN shareprice of $13.92 per fpo.

*SMM
EV = $1.72 per lb U308.
(Qld - Aus.) 181.7m(?) fpo multiplied by $0.735 equals $133.54m capitalisation minus $6.26m cash divided by 74mlb(?) U308 equals enterprise value of $1.72 per lb of U308.
SMM EV application to MTN would equate to MTN shareprice of $3.41 per fpo.

*DYL
EV = $4.50 per lb U308.
(N.T. - Aus.) 388m fpo multiplied by $0.16 equals $62.08m market capitalisation minus $3.5m cash divided by 13mlb U308 equals enterprise value of $4.50 per lb of U308.
DYL EV application to MTN would equate to MTN shareprice of $8.78 per fpo.

*RPT
EV = $1.92 per lb U308.
(W.A. Aus.) 358.8m(?) fpo multiplied by $0.088 equals $28.7m market capitalisation minus $1.75m cash divided by 14mlb U308 equals enterprise value of $1.92 per lb of U308.
RPT EV application to MTN would equate to MTN shareprice of $3.80 per fpo.

*OMC - EV = $4.47 per lb U308.
(Africa) 17.6m fpo multiplied by $1.14 equals $20.06m market capitalisation minus $2.15m cash divided by 4mlb U308 equals enterprise value of $4.47 per lb of U308.
OMC EV application to MTN would equate to MTN shareprice of $8.73 per fpo.

*JRL
EV = $3.14 per lb U308.
(N.T./W.A. Aus.) 29.4m fpo multiplied by $0.415 equals $12.2m market capitalisation minus $2.77m cash divided by 3mlb U308 equals enterprise value of $3.14 per lb of U308.
JRL EV application to MTN would equate to MTN shareprice of $6.16 per fpo.

*ARU
EV = $3.10 per lb U308.
(N.T. Aus.) 50.4m fpo multiplied by $0.29 equals $14.61m market capitalisation minus $2.2m cash divided by 4mlb U308 equals enterprise value of $3.10 per lb of U308.
ARU EV application to MTN would equate to MTN shareprice of $6.08 per fpo.

*PNN
EV = $1.65 per lb U308.
(S.A. Aus.) 48.3m fpo multiplied by $0.445 equals $21.49m market capitalisation minus $3.29m cash divided by 11mlb U308 equals enterprise value of $1.65 per lb U308.
PNN EV application to MTN would equate to MTN shareprice of $3.28 per fpo.

Conclusion.
The above really says it all in relation to value vs perception. At the day's current high of $0.915 still remains a substantial discount to peer/sector EV's.
At $2.02, (+120% to today's highest trade), MTN would still remain by far the cheapest U stock on the ASX.

As far as 'dilutionary' concerns, the company has enough cash in the bank to fund a further four quarters of intensive drilling campaigns on their tenements, where does one think the share price will be in twelve months time if it realises a fairer reflection of peer values with-in the next few weeks?

We took a position earlier yesterday morning, I haven't even considered taking profits nor trading it until fairer value is realised either by domestic monies, or Canadian/German elements which I believe will occur sooner rather than later.
My reasoning is justified in the above, hope it helps.

Warm regards to all & good luck in any & all opinions.
: )




P.S.- As stated yesterday, our NDO views remain unchanged, I will post a current opinion after Galoc impact statement & SC5X confirmation.
It's all good, NDO still remains our primary position by far but simply had to comment on MTN value as above.
: )