Is this potential deal a positive? TNG’s 2017 updated FS shows a...

Is this potential deal a positive?

TNG’s 2017 updated FS shows a pre-tax NPV of $4.7B. That is obviously being very heavily discounted for one reason or another. Many here point to the missed timelines which is fair enough and yesterday someone mentioned the fact that there are other larger projects out there with much higher grades. That doesn’t change the NPV of this project. All mines vary in size and grade. Many large, high profit gold mines operate at grades of less than 1g/t while others operate at a head grade of 7g/t. The fact that one mine operates at 7g/t does not change the valuation of the other that runs at 1g/t.
More importantly the TNG FS also shows a pre-tax net annual cash flow of A$738mill. From yesterday’s announcement, BBI has a JORC resource almost three times the size of TNG’s and with double the grades of TNG. It would be reasonable to assume they will plan to have a plant that would process somewhere between the same amount of ore per year as TNG through to at least double the amount (considering they have three times the resource). If only the same amount of throughput, with similar recoveries they would have double the cash flow because all three metals have twice the grade of TNG. Annual average cash flow would be around A$1.5B. If the royalty to TNG was conservatively just a half of 1%, then that would equate to $7.5M dollars per year of relatively risk free cash flow (risk free other than it would rise and fall proportionally with the metal prices). For a technology stock with potential for further royalties and the potential to develop their own project, a prospective PE ratio of 20 from the one royalty may be reasonable. That would give a market cap target of $150 mill. If the royalty was 1% rather than only half of 1%, then you could double the market cap target or apply a more conservative PE of 10 to still arrive at a target of $150 mill. This might be a base case target on this deal alone. Current market cap is down to 108mill. If instead the throughput for BBI was double TNG’s FS throughput (and again with twice the grade), royalties would double and TNG targets could be doubled again to $300mill. This potential from just the one royalty deal offers good upside from the current share price.
A royalty stream will not require high capex and any dilution the way that building a mine would.