latest chart, page-17

SuperWealthy,

The main positive for EMG is the CMIC put them a big step closer to production than peers with similar prospects. The financial backing of CMIC reduces the financial and development risk of Beyondie which is needed given the high capex of magnetite deposites and the project location. This also reduces the dilution risk for EMG keeping a tighter share structure.

Further it gives a big tick of approval to the Beyondie deposit it can achieve the scale CMIC are looking for. The A$200M is not really cash backing imo, more funding EMG dont have to raise but have paid for in reducing their project interest.

Some very rough figures, used CFE sale price as an example;

EMG
~59M shares
~31M 20c options
~9M FD cash
~90M FD shares

Assume;
EMGO all converted
EMG adds another 20M shares total 110M shares FD
CFE sale price A$400M for 1.56Bt @ 32.2 or 25c/t
EMG achieves same resource size as CFE
EMG potential sale price is reduced due to location (increased capex) and grade - 25% discount to CFE ore.
EMG project interest 60 %
EMG cash A$5M
Figures are conservative and i have not stuffed up calcs

EMG potential sale value/share (FD share inc cash);

A$400M * 0.6 * 0.75 (+5M) / 110M shares

~A$1.68/share

If EMG "only" prove up 1Bt then

A$400M * (1/1.56) * 0.6 * 0.75 (+5M) / 110M shares

~A$1.09/share

If EMG prove up 2Bt then

A$400M * (2/1.56) * 0.6 * 0.75 (+5M) / 110M shares

~A$2.14/share


So, since ive used CFE figures these values above are for company that has reached (almost) development stage, if CFE were to go into production you would look at increasing the valuation looking at NPV and cash flow numbers as well as EV/t (ie CFE would be worth a lot more in production than the A$400M and therefore also EMG).

Last point, EMG is not CFE, market may place higher valuations on EMG ealier due to the CMIC deal, potential cash flows and possible further corporate developments.

Hope this helps, suspect we will see a few broker numbers in the coming months.

rocketmannz,

Main issues with options is the heads are illiquid and can move on very small volume. Like today.