I think speculations about the price of Altura can sometime be counterproductive. The huge variable will inevitably be the PE the market decides it warranted.
As a long term holder and someone who has had confidence in the direction of the company I have always been perplexed at how low the company has been valued.
I don't think you can assume there will be no further dilution either. There MAY be further capital required for the expansion but there are mixed messages about this. If they do need extra capital I have said before, I hope they come to the register as opposed to the big players. Sure, having Blackrock on the register now is a positive and I believe their involvement has fuelled (in part) our recent run but reward for commitment must also be a factor. PLS used a hybrid model to raise capital and I thought we should have too.
The raw numbers that need to be plugged into any calculation are these:
1. 200mt will likely be priced at US$950t given the current market conditions. Our cap lasts for three years from initial sale.
2. That will leave us 250mt for sale at market (acknowledging that we are expanding at the request of our offtake partners and they are likely to want first crack at what we are producing). The calculations need to reflect that this 250mt is NOT subject to a cap nor a floor. We don't know where prices will be months from now let alone years. The base price will be a major driver.
The key for me is 'confidence'. I am confident we will raise production to 450mt p.a. and will be able to sustain this for 10+ years. I am also confident that the price per tonne will be above or about our cap price. With that confidence in place I have assumed an average price of US$1000 tonne at a minimum for the next three years. Simple mathematics gives you revenue of US$450m p.a. Costs have some fixed and some variable components of course but even a conservative estimation still gives nett profit of around 10cps p.a.
I have not factored in our exploration of the Kairos tenement and this could extend our LOM (acknowledging costs will be higher if we do find anything).
On thing we know is that the big players will routinely try and figure out where prices are going. The graph below gives you an idea of how spectacularly unsuccessful they have been. I am just an average investor so my predictions are probably less valid but I use them for my investing, not for others so I am really not accountable to others for them.
There are really too many variables to predict share price but given my assumptions and confidence I have a target price and I figure most others will too. As long as my confidence and assumptions stay constant, I won't be selling until I am near or over that target.
GLTAH
