agl - latrobe valley, page-9

OK so trying to do an estimate of what this news means and what MNM might be worth. (Although I think Hard Man's calculations are probably completed in more detail and less high level assumptions).

If we use Loy Yangs's 30m tonne per year requirement at $6 per tonne of brown coal, That's $180m per year in revenue. Say costs are 60%, not sure if this is too high or not, and too lazy to look at BHP. RIO and FMG cost to income. Means shareholders get to split $72m per year in dividends per annum.

AGL is valued at 11.2x earnings, but we are a mine not the energy component, so let's use a conservative 5x multiple, as BHP trades around 10x and we sure aren't them.

So this gives me a market cap of approx $360m, and yesterday we closed at just below $40m and we haven't factored in any black coal, gas or gold.

Then I speak to a trusted broker friend and he tells me this run up is all about the court case and brown coal is of no value, but I keep coming back to why would Sedgman (Theiss / Leightons) Tata, and the Japanese + 1 be funding Exergen if there is no value in brown coal and the reduction process.

So am I really sitting on my first 10 bagger ?

Happy for people to criteque my analysis if assumptions are too stretched.