What is XAM worth? Well... <grabs beer mat and pen>The Market...

What is XAM worth? Well... <grabs beer mat and pen>

The Market Cap is A$38M

It has 3Mt of Cu and 8M Oz of Au in the ground... or 4.31Mt Cu equiv (as per the MRE)

So the current resource is theoretically worth (very roughly at Cu $14k per t) about A$60B ... I'll ignore any potential resource growth

Thus current Market Cap is 0.06% of the "value" of the resource. All we have to do now is work out: what can be extracted, at what cost, how it will be funded, what the long term Cu price will be (and Au and the currency risk to the US$), will Mongolia remain "investable"...and a huge pile of other risks (the current cash position, Geology, China, WW3, all sorts of "Black Swan" event, you name it!).

Given the uncertainties above - lets look "down the road"... Rio Tinto thinks 66% Oyu Tolgoi is worth about A$8B. So I'm going to take a wild punt and say an operating mine at Kharmagtai would be worth... well certainly more than A$3.8B. On that basis the current MC is <1% of the value of a working mine at Kharmagtai. The MC only needs to go to 10% of that A$3.8B guesstimate for this to be a ten-bagger from the current share price.

So, what is XAM worth? Somewhere between $0 (If it fails) and maybe $3.16 (based on a MC of A$4B). I personally see the risk as asymmetric, I absolutely wouldn't bet the house on it, but a ten-bagger is certainly possible, and a hundred-bagger, (whilst it would require time and many, many, many things to go right) is not unimaginable.

DYOR and draw your own conclusions, but I'm happy this is in my portfolio.