6 days to quarterly, page-28

Andrew, you seem very new to the market. Let me repost an excellent post by Frader, this gives a good rundown on Atlas's situation, posted on 16-Jan-2017.

"Afternoon AGO'ers. I have decided to extend on my post regarding estimated production numbers until the June 2018 quarter to try and come to an estimated valuation of the company. See Post 21460049.

The conclusion of my analysis IMO suggests the following:


- Valuation Target (WITH AGOO exercise) = $0.164 at 30 June 2017 (using a PE of 5)
- Valuation Target (WITHOUT AGOO exercise) = $0.150 at 30 June 2017 (using a PE of 5)


For this valuation, I will assume AGOO exercise.

With AGOO exercise
- Cash on hand at the end of June 2017, approximately $250million+ (includes AGOO conversion funds)
- Debt free.
- 10,893,616,975 shares on issue.


Some important points:
- This does take into account expenditure for Corunna Downs.
- Obviously IO would need to remain stable (as stable as possible) and be above my figures utilised (see below)... Any upside in IO and this valuation increases heavily.
- This does not take into account any of AGO's other projects/cashflows which may be required for same (i.e. Lithium).
- A relatively stable AUD.

Key figures used:
- AUD factor of 1.25 (IMO, this is conservative)
- 15% discount to 62% grade IO price considering we produce lower quality IO. (usually around 10%-12% discount)


Production Estimates

Below are the production estimates per quarter used for the initial part of the valuation:




Profit Numbers

Here are the profit numbers based on Actual (Sept 16 quarter) and estimates (to June 2018 quarter). It shows the actual profit made for Sept 16 quarter of $24mil and provides estimates going forward. AUD factor of 1.25 has been kept consistent throughout the calc. There are alot of assumptions in this calc regarding the IO prices and AUD rate.

December 2016 quarter
Based on the company comments, I am thinking operating profit of $60+mil this quarter working to an average realised price of $70.13AUD for our lower grade ore.

March 2017 quarter
I have used a realised IO price of $76.50 based on recent gains in IO however, taken into account hedged production.



Cash / Debt position
Next I have assessed the estimated cash/debt position based on the production numbers and estimated operational profits.

My projections show AGO debt free early in April 2017 (being June 2017 quarter). I have also included Corunna Downs expenditure apportioned. If the company does nothing else, I am suggesting a cash balance of $250mil+ in June 2017. Whether or not the company utilise these funds towards new projects, share buy back, etc is another factor.




VALUATION

For valuation purposes, a PE of 5 has been used on total expected operational profit of $275mil + expected net cash position.




This is quite a high level view of where i believe the share price will be come June. My view is that we have come through a sustained period where AGO has been held down by selling debt holders (and fair enough) and some fortunate timing with the IO price increase.

I really hate when we have had a sustained run from 1cent to 5 cents, and it drops from 5 cents to 4.3cents and all the traders come out saying could have sold etc etc. IMO, you are rarely going to get your entries and exits 100% when investing. All you can do is your research, set targets, have stop losses and profit targets.

GLTA and please, the above is all IMO"