Thanks for the reply D&C and for the justified opinion.
However one thing you have got wrong is the Adani Royalty. It's not a matter of opinion here, just simple financial mathematics. A deposit of $200 m at 10% will yield only $20 million per annum. And you're not comparing apples with apples by compounding in your term deposit example because nobody assumes LNC will compound their royalty stream into an interest bearing investment (they'll probably be spending it on business costs or debt reduction).
Here is the CPI adjusted calculation based on a conservative forecast for coal production beginning at 25 t in 2016, increasing 5 t per annum to 60 t per annum from 2023 onwards, with the $2 per tonne benchmarked at the first year of production (or perhaps it was benchmarked when the deal was signed?) and adjusted for CPI at 2.5% thereafter.
The NPV today of this cashflow @ 15% discount rate is $486.2 million and the NPV @ 10% discount rate is $784.1.million.
I can't imagine why anybody would apply a higher discount rate than 15% on this income stream (Adani are a very large contractual counterparty therefore the risk can't be deemed that high here) so worst case it that the Adani royalty is worth about $500 million today. This alone represents about 60%+ of LNC's market cap.
LNC Price at posting:
$1.53 Sentiment: Buy Disclosure: Held