Ann: Share Purchase Plan, page-61

Just a few thoughts. Time will tell on any of this.

Let’sallow for all the stock and options on issue committed to this deal. Thatnumber is 10billion bits of paper. (Management won’t be able or want to sell. They are escrowed to 2027 anyway.It would be capped at $50m based on 0.005c per share. It was worth $4m pre thismanagement change. The stock has risen from 0.001c to the current 0.005c with their incoming dilution. The company has more than 10 bagged on the marketcap already allowing for dilution.
Flanno has a 50m ton base target. He has said that number gets them mining. We don’tknow how many tons pa he wants to mine and what the final margins will be. Wedon’t know how he will fund the project. I assume along similar lines to Atlas. The company will need to raisemore money in due course as using 4 rigs with assays will consume money. This ischeap drilling in a low cost environment, but it still adds up.

You can try and value this on a dollar per ton outcome. Its gets harder to value when speculation hits or they really hit a fat target. We don’t know if AMD will find 50m tons or hundreds of millions of tons. If hegets early success, then he will want to drill the living crap out of thisthing to gain scale. I am going to guess that he would want the stockthrough 1c min before they raised again. The next raise won’t be $4m as thatwould be inadequate. The higher the price, the more rigs, the larger the raise. Thosesorts of games get done with instos.
Every 1c is equal to $100m marketcap fully diluted. So the question is - ‘What is 50m tons worth’? What’s 100mtons worth? What’s 200m tons worth etc. A broker or newsletter will probably cover this at some stage.
If they get early success, then he willwant to raise $10m min to keep the momentum going. That is another 1billionshares at 1c.
This is going to come down to marketsentiment, iron ore price, drilling success and corporate outcomes. He willneed to keep up a cracking pace to maintain the markets interest. This is why these things are so hard to value. Some people wont be comfortable with the sovereign risks regardless of the massive build out. My answer to that is dodgy political types will want the cash flow, so its probably going to work regardless of who is in power.
The closer the infrastructure gets to operation, the more valuable the asset becomes. No one knows what the iron ore price will do.

Lets just poke a stick at the sky.
Can AMD be worth $500m one day?
Assume 14b shares on issue. That should comfortably fund this into a real resource. That comes in around 3c per share or 6c per share at $1b market cap. That is 6-12x todays price. That would be an amazing result. This is all speculation. Some might even say that it is pure guess work. These things never go in a straight line. dyor