The potential financials;
I am revising this post to try and highlight just how positive this ANN is for the company. People selling off on what I would deem awesome news!!
From the ANN
Hallmark Minerals (I) Pvt. Ltd. in the second phase of expansion is in the process of installation of major grassroot plant of 50,000 tons annual capacity to produce low density proppant and resin coated sand proppant. The company has already entered to an agreement for the supply of diaspore clay, lithomaige and kaoline to be as raw material and procured land in SEZ area.
Potential licensing fees @ 10% of revenue
50,000 Tons (at full output, assuming the plant is exclusively used for LWP) = 110,200,000 pounds.
@.26 per pound = $28M revenue per year, at 10% of gross revenue = $2.8M licensing at full production (with little to no costs attached).
.26 source
http://www.lwptech.com/IRM/Company/ShowPage.aspx/PDFs/1369-20104147/CoretrackPresentationUpdate
Operating profit of the JV
$28M revenue, if we assume 25% profitability = $7M profit for the JV, assuming the 60% split gives LWP $4.2M
Licensing fees = $2.8M
Operating profit = $4.2M
Initial fee = $1M
Total Potential = $8M
Optimistically
$8M x 13 times earnings (assuming no cost attached to licensing) = $104M - More than 3 X More than our Market Cap on this deal alone!!!!
(Source The average PE multiple for companies on ASX
is about 13 times current year's earnings.)
http://www.asx.com.au/education/inv...-high-pe-stocks-that-are-still-good-value.htm
How many other licensing deals like this exist in the World!
Maharashtra has 110M population, India has 1.2B, perhaps there is another 10 times this opportunity in India alone?
With the MD missing the recent meeting being in the US, what do we have upcoming from there?
Now that the terms of JV's have a benchmark, may we make hay whilst the sunshines
A screaming buy to me!
