AHQ (ASX) AHQ Chart

AHQ NGE capital July 21.pdf
Some coverage on AHQ - here are my thoughts - not investment advice - DYOR

In an earlier interview with Matt Gordon of CRUX, when Telkwa was the main play - they talked about a 5x prospective EBITDA being the valuation metric for the company as the mine came into production - In the original PFS for New Elk the production plan was for 2.7Mctpa without blending with a LOM EBITDA of US$153m. The NGE report is based upon 1.8Mctpa which i assume includes blending - if the original production plan is reached and remember we have no insight into how the adjacent Montecito seam will play into the mine plan - not to mention the new acquisition of Black Warrior Minerals then 2.7Mctpa might be conservative. Bear in mind there is a cost differential of US$13.70 between the coal bought for blending and AISC for mined coal (before you take account of the US$6/t cost reduction from reinstating the rail link - mentioned below)Also the GEAR placement included an in principle agreement to provide funding c.US$20m to reinstate the rail link from the CHPP to the rail spur which has 2 benefits - it eliminates the current permitted constraint on road haulage to the spur which is currently less than 1Mtpa and reduces AISC by US$6/tI am no expert and this is not investment advice - but based on my modelling of a prospective 5x EBITDA multiple - i get the following
This places no value on TelkwaDYOR - i hold a significant stake in the company - so i hope i am right - but i may be completely off track
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@Macca64
In an earlier interview with Matt when Telkwa was the main play - they talked about a 5x prospective EBITDA being the multiple as the mine came into production - so i dont think 8.6FCF is off the charts - In the original PFS for New Elk the production plan was for 2.7Mctpa without blending with a LOM EBITDA of US$153m. The NGE report is based upon 1.8Mctpa which i assume includes blending - if the original production plan is reached and remember we have no insight into how the adjacent Montecito seam will play into the mine plan - not to mention the new acquisition of Black Warrior Minerals then 2.7Mctpa might be conservative. Bear in mind there is a cost differential of US$13.70 between the coal bought for blending and AISC for mined coal (before you take account of the US$6/t cost reduction from reinstating the rail link - mentioned below) Also the GEAR placement included an in principle agreement to provide funding c.US$20m to reinstate the rail link from the CHPP to the rail spur which has 2 benefits - it eliminates the current permitted constraint on road haulage to the spur which is currently less than 1Mtpa and reduces AISC by US$6/t I am no expert and this is not investment advice - but based on my modelling of a prospective 5x EBITDA multiple - i get the following This places no value on Telkwa DYOR - i hold a significant stake in the company - so i hope i am right - but i may be completely off track