Hi Sevo, as a fellow investor I understand your frustation. Sometimes I too wonder why a particular company I've invested in does not have a higher share price especially if it ticks all the boxes in technicals and approvals, SOI etc. That's when I start comparing financials and this is what I've found so far.
So, while nameplate cap and LOM are very similar for AMN and RWD, and RWD has lower SOI than AMN, the financials are a different story.
(1) C1 cost per ton (FOB): AMN has published a figure of $220/ton vs RWD's $335/ton. That's a significant difference and direclty affects the EBITDA and in turn other derived metrics. Note that the C1 cost is the defining cost as everything else derives from here. In other words, it takes care of any grade variations as well.
(2) Capital Intensity: (CAPEX spent for each EBITDA dollar) It takes $2.88 dollars of CAPEX to create 1 dollar of EBITDA in the case of AMN. In the case of RWD, it takes $3.43 for each 1 dollar of EBITDA
(3) NPV (post-tax) @ 8% WACC: AUD909 million (AMN) vs AUD293 million (RWD).
I understand your point regarding lower SOI in the case of RWD, but based on my personal experiences and the relative importance of liquidity, I dont think that this factor has any bearing on the share price. To bolster my point regarding the importance of liquidity, please read the following excerpt from another HC post (not authored by me, but which I found very informative). The following blurb is a guy talking about Jervois Global and its recent share price action. No cross pomotion intended, Jervois is in a completely different sector anyhow - Cobalt pure-play:
"The share price action has been outstanding - look at the chart. It was only mid-August we were at 43.5c post CR, we're now double that in just seven months, a 100% return - and this is no microcap meme stock, we're $1B+. It's been an amazing performance, and there's no wonder that certain funds/holders would look to take profits along the way and lighten their position here and there for a whole variety of reasons, many of them probably nothing to do with Jervois itself.
The fact is, Bryce + Co wanted liquidity in the stock, and that's what they've now got. Liquidity is vital to attract the biggest end of town - those funds need to be able to enter and exit positions without shooting the SP up +10% anytime they want a decent stake. So whilst you may see the SP action as some nefarious offscreen deeds, in reality it's a great sign - we've got good liquidity which means the proper players will be prepared to take meaningful positions. Anything that stonks and goes parabolically upwards - think BRN, NVX, IOU, VR1 etc - will come down again, often just as steeply. We don't want that kind of crazy price action. Slow and steady is what we want, including days like today where it pulls back and consolidates a bit."
Just goes to show the importance of good liquidity in a stock. Now, in saying this, I do not expect all speccys to rush and bloat up their SOI just in order to get great liquidity, on the other hand, it needs to be managed sustainably and keep hand in hand with the de-risked NPV for that stage in the Lassonde curve.
I hope I've not stpped on your toes in any way - not intended mate. I do have a high regard for ya.
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