Based on the financial forecast (EBITDA of $25 mil equates to NPAT of $15 mil approximately), I think MHM fair value is between $0.80 and $1.40 depending on market sentiment, and depending upon the ability of management to achieve stated financial goals (not proven at this stage).
Certainly an interesting one to watch, but too many unknowns at this stage - such as what level of throughput do they expect in years 1/2/3 - i.e. what timeframe to reach full capacity. This is very important, as the USA plant may not make a great deal of profit if they are only running at half capacity - I would expect a high percentage of the forecast profit to be generated from the last 125 Tonnes, with the first 125 Tonnes just covering costs.
A good update overall.
MHM Price at posting:
85.0¢ Sentiment: None Disclosure: Not Held
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