Its probably a hold IMO - I've changed my sentiment
I get the following sp:
Upfront cash $10m
Current cash $5m
PV of exercised option $41m
Royalty $50m
Cash burn -$10m
Gives you around $96m or 3.5cps
The upfront $10m is only going to pay for expenses for the year and a half until the expiry. We don't even know if the option will be exercised so you need to factor in additional risk into that (I've reduced the value to $50m). And they can extend the option for a piddly fee.
Then what are they going to do with the $55m if the option is exercised? They'll probably give a large portion back to shareholders then just keep the rest to pay their wages and exploration costs on canegrass. They'll also probably sell the royalty back to Todd and take another large haircut.
How much money did they pump into proving up the deposit? A lot more than the current share price I'm guessing
FMS Price at posting:
1.6¢ Sentiment: Hold Disclosure: Not Held
