The current chart pattern still looks remarkably similar to the November rally that came up off the same prior low of 3.7c. The chart has now established a double bottom over a 6 month time span at 3.7c. Trading volumes are a little higher this time around at the same stage of the rally as shown in the blue rectangles below.
I recently posted that I had hoped to see the sp rally prior to any funding news and we have seen that this week with a surprisingly very easy break through 5c on Wednesday. It would be great to see a further rise ahead of any major news but whether we get that or not, any positive major news such as a signed loan agreement should easily see the sp pass the November 9.5c high because that level was achieved without the recent update on customers and the govt guarantee on the BAI loan and without the loan agreements that would allow the completion of construction. 9.5c was achieved only on the news of the SWF investment and the decision to start stage 1 of construction (civil works). The rally was stopped by a cr, which was followed by a lack of news over the following months. This latest financing update has reversed that 6 month decline.
It's now been a very positive two weeks for the sp most likely thanks to that funding update. It should be a very positive two months ahead on any completion of funding and the start of stage 2 construction which could easily push the sp above back up above 10c.
Just two weeks has given us 46%. The next 1-2 months more could easily give us another 100% to 10-11c and I can't see any good reason to not expect further strong gains beyond that as production nears and risk falls.
Construction is now underway and that plus news on being fully funded would be major drivers this time around that we didn't have during the November rally. There shouldn't be the same lack of news flow either this time around, after full construction funding is completed and construction work accelerates.
The DFS, AFTER tax, BASE case NPV that was attibutable to Minbos was US$202 or A$312mill prior to the SWF investment. The SWF investment reduces that by 22% but the current $541/t TSP price is 28% higher than that DFS base case assumed $422/t.
The DFS sensitivity table below shows that a 20% increase in TSP price, increased MNB's share of NPV by a larger 28% to US$261 or A$402mill. MNB's share would now be 78% of that, i.e. A$313.That's with a TSP price 20% above base case. The current TSP price is actually 28% above base case and in an uptrend. The spot price NPV for Minbos's share should currently be around A$350mill.
Compared to the $313-350mill after tax NPV, at 5.4c, the current mc is only A$52mill.
Even 10c would only give MNB a fully diluted (for all outstanding options) mc of just $115mill. That should be an easy near term target compared to a spot NPV of $350mill.
Keep in mind, the fully diluted mc implies that all outstanding options would be exercised and that would raise $14.6mill in cash which itself would raise the company valuation by that cash amount.
A 21c sp would give MNB a fully diluted mc of $241mill. Still well below the after tax NPV's above so also a very realistic DFS based target.
