Remember the $1.30 was based on 50% discount to the 100mt resource. An upgrade to the 500mt multiplies this by 5x.
The Southern Cross valuation is $1.30 based on a discount to sector valuations. Based on CSG valuations CNX is worth between $1.40 and $6.90 with a $4.15 average. Based on UCG it is $2.15. Based on simple EV/EBITDA (Ex reserves) then it is $1.60. Provides an average of $2.64. SC then discounted this 50% for the risk of the pilot plant to give. $1.30....
But here lies the problem. Since the research there have been 2 major changes to the assumptions. LNC was worth a lot more and ORG just did a deal at 18% above the Petronas / Santos deal. So even if I just add the 18% to the 50% discounted value I get a target of $1.53. If I add 18% to the average valuation of $2.64 then I get $3.11.
And the risky part gets cleared up within the next 3 weeks..... :) Luvley
