@mad max
Sheffield Resources is a 50% shareholder of the KMS JV.
The forecast dividend (cash and franking credits) from KMS JV to SFX is expected to be in the order of $100 - $120mil pa (post repayment of debt).
This equates to cash inflows (SFX from KMS) in the order of 25c-30c per share (includes franking credits).
How they spend these inflows (ie dividends to SFX shareholders, retain cash in SFX, or invest in other growth opportunities) should be secondary in shareholders mind, especially if one has faith in management's investment decisions.
In fact, investing in growth opportunities (assuming the investment turns out to be value accretive) will be better for long term shareholders than SFX paying dividends. (ie the shareprice will go up more than the dividends you would receive).
As I see it, the main point is that TB will shortly be a cash cow which should underpin an SFX share price well over $1.50 - $2.00 and provide the foundation for SFX to grow into a company that could be worth multiples of that.
Bruce has touted a dividend policy of: 50% payout of dividends received from KMS with the other 50% retained for growth opportunities, this would indeed mean a payout of 12.5 - 15c per share (includes franking credits).
on another point you raise, I wouldn't be surprised to see first shipments ahead of expectations given production started a quarter ahead of forecast.
In summary, it appears that a stock with an asset that can deliver free cashflow of 25c-30c per share (includes franking credits), is very conservatively priced at 60c per share, especially given the stage of production we are at.
I have issued the challenge previously, and nobody delivered. If someone can show me another ASX company comparable to SFX that is priced as 2x EBITDA I will be very surprised.
This valuation disparity, I believe, will correct itself in time via a healthy increase in the SFX share price.
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