In my opnioion MGU should not be sitting at these levles , $15 million mrket cap for a shovel ready fully permitted high grade resource is crazy , but there's a few reasons as to how we got here .
The tanking of IO prices back in 2021 was a major set back and very unlucky timing for MGU ,Magnum had a sweet deal with Anglo for DSO with pre payment of $US8 million see ann on 11/06/2021 , https://newswire.iguana2.com/af5f4d...tle_MGU_Announces_Mandate_with_Anglo_American.
The next issue was a change up in the board , Dano and Don had a plan set and then all of a sudden resigned , Neill came onboard with a different plan , obviously this will cause more delays and this has probably set us back by another 6 months to a year ,FYI im happy with the direction Neill is taking , i fully support him and believe in him .
The next issue was the CR , i am pretty certain that those who took part in the CR are the ones who were responsible for all the selling over the last few months , this has been detrimental to the sahre price , its pretty bad that the stock couldnt even hold 3.5 cents or the riase price .
So recently we are starting to see a bit of movement in Magnum , volume is picking up and so is chatter on social media , when it comes to spec stocks like this the market is starving for information and if i was a new investor lookng at Magnum as of to day what have i got to go off ?, theres no recent studies , no figures , just a few ideas , so theres no real way to value Magnum .
On the other hand the long term investors are pretty well aware of whats in the pipe line , finally we have studies that should be announced to the market soon , conceptual studies for the iron ore mine , benefication plants and Pig Iron plants , thsi will be the first real set of figures we willl have seen and if we can get an NPV then the marketc can put a valuation on Mgnum .
As a general rule of thumb for fair value ill list below where i think the market cap should be at various stages , this is my opinion only and id be happy to hear other thoughts.
1. Scoping Study or PFS with no offtakes or finace , roughly 20% of NPV .
2.DFS or BFS wwith no offtakes and no finance 30% of NPV .
3. DFS and or BFS with offtakes 40% of NPV .
4. Any of the above with finance in place 40 to 50% of NPV .
5. In construction close to production 50 to 70% of NPV .
The above is my opinion only and not financial advice .
, lets use $75 million a year in revenue for 5 years which is $375 million US , well MGU market cap should be sitting at around at least half that pre production with offtakes and finace in place which is $187 million market cap or 12 times the share price form here so roughly 24 cents , lets low ball it and say 12 to 14 cents , FYI Magnum was 19 cents when thye secured the deal with Anglo !
Obviously the above is an estimate but its something to go off, once we get an NPV for DSO or Pig Iorn then the market can start to value MGU accordingly .
In regards to Pig Iron if Magnum can produce 500,000 ton's a year with a profit of $200 a ton then thats $100 million a year in revenue , over a 20 year mine lfie thats $2 billion , if Magunum were a measly one tenth of that then that gives us a $200 million market cap or roughly 25 to 30 cents .
The potentail for Magnum is huge , we just need management to deliver and push it forward , roll on the studies .
My figures have not taken in Tax and things like that so they are very loose figure but i have tried to lowball as much as possible and happy to hear other thoughts as well .
AIMO DYOR .
MGU Price at posting:
2.1¢ Sentiment: Buy Disclosure: Held
(20min delay)