Note: This transaction was completed at 10x Royalty + some very marginal unexplored lithium permits.
1. Royalty Presently 9 million per annum (assuming iron prices lower than today) and increasing once MIN receives final WA govt approval to expand to 10 mpta. Ground work already completed and as per MIN corporate presentation plant and equipment are plug and play so rapid deployment and commissioning (less than 12 months).
MIN bought out last royalty payment at 10 x royalty payment.= 90 million valuation today / 180 million valuation in 12 months.
2. Copper asset with grades hitting 11% in Australia and with copper price booming, but let us assume the copper assets are no better than the lithium assets so we will apply 0 value
3. Gold asset - in a terrific location but let us also assume no value
4. Cash at bank end of year should be AUD 10.5 million - this should be included
5. Tax losses being held by company are AUD 30.0million + so the tax equivalent benefit at 30% tax rate is a value of AUD 10 million.
So if we assume 0 value for permits and current assets held by the company then the potential transaction value looks like this in my opinion:
1. Royalty 90 million (based on prior MIN transaction to buy out a royalty) + 2. Cash 10.5 million + 3. Tax losses 10.0 million
= 115 million vs 37 million (share price as of close yesterday). 310% upside assuming not value for existing permits and prior drilling.
What I like the most about TLM is that as a shareholder there is no need for the company to dilute me as the royalties pay for all exploration expenditure with very minimal head office costs.
TLM Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
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