[#28]Some (revised from previous post) back of the envelope...

[#28]

Some (revised from previous post) back of the envelope guesstimates on equity funding Hastings Stage1 Yangibana mine and beneficiation plant and Stage2 hydrometallurgical plant:

As at today (31 May 2023), Hastings has 129,276,652 shares on issue and around $110,000,000 cash at bank (30 April 2023 cash balance was $129,000,000). At $1.70 per share, has a current market capitalisation of $219,770,308 and enterprise value of around $263,000,000.

Stage1 is expected to cost $383,000,000 with construction starting around September 2023 and completion planned for December 2024.

Hastings will need to raise around $200,000,000 to fund the balance of Stage1 expected expenditure. It may do this via an equity raise, which if at $1.50 per share would issue a further 133,333,333 shares to bring total shares on issue to 262,609,985 (possibly by December 2023 and a market capitalisation at issue price of $393,914,978).

Hastings plans to begin commissioning and ramp up of Stage1 in early 2025.

The Wyloo $150,000,000 exchangeable notes will be due in 2025. The amount payable will likely be around $220,000,000 assuming BBSY averages 4% over the 3-year term. If the notes are converted at $5.50, then a further 40,032,185 shares would be issued to Wyloo bringing total shares on issue to 302,642,170.

If the Hastings share price is below $5.50, then Wyloo may not convert the notes to shares and Hastings would need to fund $220,000,000 to settle the exchangeable notes outstanding balance.

Hastings may raise the $220,000,000 via an equity raise, which if at $2.00 per share would issue a further 110,000,000 shares to bring total shares on issue to 412,642,170 (possibly by June 2025 and a market capitalisation at issue price of $825,284,340).

If Hastings deliver a profit after tax of $63,000,000 in 2025, this would equate to $0.15 per share. At a share price of $2.30 would equate a price-to-earnings ratio of 15.1.

Stage2 is expected to cost $453,000,000 with construction starting around September 2026 and completion planned for December 2027.

Hastings will need to raise around $400,000,000 to fund the balance of Stage2 expected expenditure. It may do this via an equity raise, which if at $2.30 per share would issue a further 173,913,044 shares to bring total shares on issue to 586,555,214 (possibly by December 2026 and a market capitalisation at issue price of $1,349,076,992).

If Hastings deliver a profit after tax of $329,000,000 in 2027, this would equate to $0.56 per share. At a share price of $2.80 would equate a price-to-earnings ratio of 5.0 and a market capitalisation of $1,642,354,599.

If Hastings deliver a profit after tax of $455,000,000 in 2028 and distributed a dividend at a 30 per cent payout ratio, the dividend could be around $0.23 per share. A share price of $4.00 in December 2028 from around $2.00 in May 2023 would equate an annualised return of 13.2 per cent per annum exclusive of any potential dividend distributions.

Alternatively, if funded the $400,000,000 additional capital required for the Stage2 expected cost, then the business would have 412,642,170 shares on issue rather than 586,555,214.

If Hastings then deliver a profit after tax of $455,000,000 in 2028 and distributed a dividend at a 30 per cent payout ratio, the dividend could instead be around $0.33 per share and a share price of $5.50 with a price-to-earnings ratio of 5.0 and a market capitalisation of $2,063,210,850. A share price of $5.50 in December 2028 from around $2.00 in May 2023 would equate an annualised return of 19.9 per cent per annum exclusive of any potential dividend distributions.

Of course, if alternate funding is sourced either via debt or equity raises at higher/lower prices or advanced in partnership with a third party, ultimately the number of shares eventually issued would vary and augment the return profile. Variance in future profitability would also impact future returns and valuations.

The big influences on the Hastings business will be composition of funding, the development through construction timing and costings to reaching nameplate production grade and volume, and market commodity pricing.



— DK.. just some thoughts, do your due diligence and decide your own actions.