Dear Ladies, gentlemen and transgenders (that one’s for you Virginia – sorry Sally Woof)
It’s time we get a whole lot more realistic about valuation and Share price movement over the coming days.
I would like to keep this a civilised discussion minus personal insult or over dramatised reactions, I invite you to comment but urge you to be accountable, explain your pricing strategy and let’s just see who is on the money this week.
Note to all, if DeepFreeze or VirginaWoof join the party please just ignore them, don’t engage, the repetition has destroyed this forum the last week and I think there’s a good case for revised medication.
Now take your shoes off at the door, no stubbies or singlets after 9pm and let’s get started.
The announcement of an off take partner has come completely out of sequence to what any of us had expected and the share price had been floundering after a decent recovery due to international rumblings with little to no immediate basis.
So in short we have a huge announcement at a time when our share is exhibiting an unrealistically low value. If we unpack this, the order of events was supposed to be production samples to potential customers, Thackaringa results and Flemington expansion results. None of these come anywhere near the gravity and impact of the deal with SK, so in short our big ticket win has come a little early.
To establish a valuation, I think we need to start with a fair value on our share, adjusted for the craziness leading up to the trading Halt, I am in total agreement with BB (The Big Boy) of .12c
Add to this the expected Share Price lift from the dispatch of samples .03 - .05c
Thackaringa results .03-.05c
Flemington expansion .03-.05c
If all this occurred prior to an off take announcement the share price range would have been .21 - .27c market cap $546m - $702m
Now working with the lower valuation of .21c (prior to the off take announcement) and using a little understanding of psychology and human behaviour, one would expect an off take announcement of the magnitude of the SK offer to result in a doubling of the share price .42c
For now it’s a doubling off an exceptionally low base due to the reversal in order of announcements but I have no doubt that if the order of events ran as expected we would see .40-.45c in the next few days.
But this won’t happen!
I DO think .30-.35c which is .40-.45c minus .03, minus .03, minus .03 (due to lack of prior announcements) is a fare and realistic target for the coming week.
And guess what that gives us a Market Cap of $780m - $910m, surprisingly close to that of our best mate (actually another great company that I like) CLQ.
Except we have the world's 57th largest business partnering with us and 2 other mines hanging in the wings.
Think about it ladies, gentlemen and thingy, the world is not fare, but this is our fair value.
Be kind.
Expand
(20min delay)