right on!
thats what I thought mate
they get those prices for the quality of the ore, and you dont multiply the spot lump or fines price by the Fe content to get the price they receive
Thus WPGs gonna make a MONSTROUS EPS, even if you dilute for future capex!
Capital structure is similar to YML - both have very few shares! Which gives them lee-way to dilute for capex if need be.
MOst of these small coys will go 70:30 or 60:40 debt to equity anyways for CAPEX for development.
WPG will make HUUUUUUUUGE EPS and its already an advanced project.
lets say they get 100USD, we know costs are 55AUD and we lets say 3mill proddy:
100USD*1.13 for currency =113AUD
113AUD revenue - 55AUD costs = 58AUD
58AUD* 3mill tonnes = 174AUD
after tax = 122mill
Assume theyll issue an extra 50mill shares
122/140 = 87c EPS
and this is with inflating the equity and not assumming any debt for capex (100% equity financing)
they have the hematite PLUS the MAGNETITE, so they can easily get a PE of 10
$8.70 under the above assumptions.
I dont think theyll dilute that much anyways
120mill equity base is more realistic and rest debt financed.
So using 120 mill equity, we get EPS of circa $1.00 per share!
Using a lower long-term price of say 70USD,
70(1.13) = 80AUD
80AUD- 55AUD = 25AUD
25AUD*3mill tonnes =75mill
75*0.7 = 52.5 after tax
EPS = 52.5/120 = 44cents per share
Like I said, with hematite and a tonne loand of magnetite, they can easily garner a PE of 10 or over when in proddy due to the 500mill+ tonnes of magnetite they have sitting in the ground!
look at AGO for example!
they can do another capital raising in the future for development at a MUCH HIGHER PRICE if need be and issue debt for financing
theyve already said theyre gonna try and minimise future dilution .
With the DSO PLUS all the MAGNETITE , I really like this company.
Grades are very high too.
the magnetite factor on top of the DSO was what made me buy
Plus theyre a more advanced project, having completed a feasability study etc.
People need to wake up to this stock
Obviously logistics are key, but its one of the more advanced projects and they have the capability to dilute further and borrow for logistics development to nearby rail link to port.
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