Just dusted off the DFS/PFS valuation proudly delivered April 6, 2011 by GC, and he proudly states an estimated NPV of $4,000,000,000.00 for this project or $1.29 per share.
I would imagine that the above valuation is based on 100% of production, which is obviously not the case, so, using a quick and dirty approach here taking off 23.5% of this valuation (reduced for government and minority interests) we are left with NPV of $3,060,000,000.00 or $0.99 per share
So, ending up with a current valuation of $0.39 - $0.62 with a mid of $0.52 is leaving me a bit high and dry fellas.
Some of the conservative revenue assumptions in today's valuation is that it will take 4 years to get to production, whereas the DFS suggested only 3.
I am not going to go into all of the short comings of this report chapter and verse, but this valuation, IMO, is amateurish and is lacking in detail.
Clause 7.4, the Valuation Summary, only shows the total NPV of each line items in the cash flow. Given its a detailed report, I would have liked to see the full 25 year detailed summary to see what was going on.
Furthermore, EY are using a WACC of 14.5%-16.5%. Not sure what the DFS WACC was set at, but couldn't imagine it would have been that high, thus penalising the NPV further, but things have not been entirely transparent with our board.
This leaves more questions unanswered, in my mind, that it gives me answers.
Maybe I am just a bitter and twisted, disgruntled shareholders now.
Oh, and BTW, I lightened the load a bit today and sold 250k at $0.38 today. Better opportunities elsewhere.
HB
SDL Price at posting:
36.5¢ Sentiment: LT Sell Disclosure: Held
