3 cps EBITDA, 130m NTA, 51m MC, page-2

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Merchant2000

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13/08/14

13:43

Post #: 13811097
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Originally posted by Pecs ↑

(1) As I pointed out in previous posts, the earnings that Early1 has calculated (as of today's update) of 2.1 cents is actually EBIDA (ie EBITDA less tax). If we add back tax to Early1's estimate this gives 3.0 cents EBITDA (earnings before interest tax depreciation and amortisation), a more universally recognised figure.

Where Early1 has used a range of multipliers for EPS, and 10x as a base case, for EBITDA multipliers of the order 5x are commonly used (though open to as many criticisms as an EPS multiplier in calculating company value). This implies a fair value of around 15 cps. Once risks associated with this transaction are removed, this could be a reasonable estimate for the first re-rating of CSD shares. Coincidentally, at 880m shares this would give a $132m company valuation, very similar to the net tangible assets (NTA), or book value, calculated by Early1.

Of course, once the DFS for tin project is completed, and financing arranged etc, there will be a further re-rating down the track when the risks are slowly mitigated and the market gains confidence.

(2) If $130m of assets is being claimed, then the market cap of the company must be calculated using the increased share base, so would give 880m x $0.058 = $51m. It is misleading to give the MC as $15m.

Based on these items, I have started this new thread with a corrected Title.

Cheers
PECS

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Good post Pecs

Just to clear up any misunderstandings
what % of shares will SPM/SPII own in CSD if mou is executed

The announcement Clearly states 600m + 30m will be issued
but also clearly states that the convertible note will be convertible into 165m ordinary shares on or before the 1st Sept 2015

Thanks for any input or clarification

CSD Price at posting: 5.8¢ Sentiment: Hold Disclosure: Not Held
1 Upvote

0 Great analysis

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3 cps EBITDA, 130m NTA, 51m MC, page-2

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