post-finance re-rating valuations

Hi POS people,
I’ve been watching this one for a while now (intrigued particularly by the Twiggy factor) and have recently taken a position.
I’m interested to hear people’s thoughts on what they think this might re-rate to if/when financing were to come through.
I note from the Mar Qrtrly (and the Mine Life Weekly (MLW) Report of 1 May), an NPV of US$546m over initial 10 year life of mine is quoted (using Nickel price of US$8.46 for 2013).
I further note that this is before the recent drill result announcements on 4 June and 11 July.
From what I understand, there are around 518m shares if all options and convertible notes are converted (409m shares excluding these). (Also note that conversion of all these would add ~$36m to cash)
If we take the US$/AUD$ conversion rate as $0.92, using the figures above (NPV US$546/AUS$593 and # Shares 518m) we have an NPV per share of ~$1.14 – around $1 higher than the current SP.
I don’t actually think this figure is feasible (in relation to the parameters of this valuation) due mainly to the (IMO) high figure that has been used for Ni (US$8.46). However, by my calcs, using US$6.50/AU$7.14 Ni price over the 10 years with opex of AU$4/lb (the company reports quote US$3.35/(AU$3.64)) and required rate of return at 6%, would return an NPV of ~AU$267m – NPV/Share of ~$0.515.
Of course all this is moot if the project does not receive funding, however having enjoyed some successful returns in the early days of FMG I am banking on Twiggy delivering again on this one.
Some of the things this valuation doesn’t take into account include the following:
• 4 June Drill Results;
• 11 July Drill Results;
• The approximately 30% more nameplate capacity of the plant (MLW Report 1 May) which could take production up to ~12.5k/year;
• Exchange rate variations;
• The information listed under “Significant Drill Intercept and Further Exploration” from pages 5 & 6 the 11 July announcement, which mentions assays of 12.01%, 10.4% and 13.32% Ni. These could add significant lifespan to the project. In particular I note the 13.32% assay is quoted as being from drill hole WUG0046 intersecting F shoot 45 below and 33m south of existing F Shoot drilling.

IMO this project is shaping up very nicely, we just the need the funding to unlock the potential

Looking forward to hearing people’s thoughts on this.

Disclaimer: I’m not a financial advisor and this is not financial advice. As always please DYOR.

Cheers