Hello. I am sorry to be the bearer of bad news however in my opinion, BKT must overcome the following hurdle.
Assuming BKT will not do another capital raising for on-going expenditure (which appears unlikely), BKT currently has around 1,300 million shares. Now my spreadsheet shows BKT needs to raise US$72M or A$112.5M in equity. Is this accurate?
If so, graphite appears current around US$1030 per tonne per the most recent BKT presentation. 89,000t x US$1030 less US$518 opex comes to around A$30M in net profit for BKT (refer to spreadsheet below).
If BKT raise A$112.5M at 10 cents per share, the EPS around be around 1.2 cents. The share price would be around 15 cents. However, those large investors funding the equity component of the CAPEX would only make around 50% gain, which is not satisfactory. Therefore, the capital raising price must be dropped until these equity investors earn around 200% gain. This does not appear possible; unless BKT can perform a type of miracle beyond my basic understanding.
Below, if the equity is raised at 5 cents, the investors will only make 100%. If the equity is raised at 2 cents, the investors will make 156%.
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