ADN's 24 August 2023 and 6 May 2024 DFS provides what for me was lots of general information. For me, it required lots of calculations to assess the DFS more accurately. The key information for me in the respective DFS was:
In summary, by doing some calculations based on the above information, I get the following results:
1. Average
revenue per tonne appears to be estimated at
$858.12 per tonne, i.e., around 7,233,250 tonnes of sales divided by $6,207,000,000 in life of mine (LOM) revenue.
2. Average
operating costs of around
$386.59 per tonne sold, which generates a
gross margin of around
$471 per tonne.
Note: the DFS used operating costs of $183.89/t of ore processed, which must be converted to costs per tonnes sold.
3. The above revenue per tonne and operating costs per tonne allow me to start forecasting the possible
earnings per share ADN may achieve. The table below assumes 66% debt financing, 33% equity financing plus another 1 billion shares issued to finance ADN's staff & admin costs over 2 years. The capital raising price for 33% of the CAPEX funding is 1.2 cents because the investors could receive a 200% return on their investment for Stage 1A alone; particularly of the ADN operation remained only at Stage 1A. In summary, if ADN announces success in obtaining $60M in debt financing, I expect the ADN price to rise and that the remaining $30M in CAPEX funding will be raised at at least 1.2 cents per share (using a forward PE ratio 10).
4. If the forward PE ratio is increased to 12, due to the future potential upside/expansion of the ADN's operations, the 33% CAPEX raising could be done at 1.6 cents.
5. To conclude (despite the risks of financiers not being assured by the off-take arrangements), if ADN is successful in obtaining the AUD$60M in debt financing it is seeking, I am hoping the ADN share will reach
1.2 to 1.6 cents for the $30M in equality financing.
6. In the long term. on full operations, my
long term share price targets above are 13.2 to 14.4 cents, which are similar to the analyst valuation target of 13 cents per share.
(20min delay)