Enterprise valuations for mine dev stage (DFS/BFS) resource companies are on average around 29% of NPV, and that's excluding outliers (extreme vals on either side). It's a pretty reliable metric too.
ABR's NPV is AUD $3 billion for the full project, so you could expect to value ABR now at ~$1bn.
But for the most part last year ABR seemed to hit resistance around the $100m MC (when SP was around 35c). If you use NPV for Phase 1A only, which is about AUD$300m, then $100m MC would be fair value at a 30% EV/NPV valuation.
Now it's broken out, heading up and is sitting around $168m MC ($210m fully diluted). Phase 1A is mostly de-risked and the market is now looking ahead to Phase 1A & 1B.
See where I'm going?
Below is the NPV for each phase of Fort Cady. If the market is ignoring full NPV and is instead valuing ABR on it's NPV by phase, then re-rate could see it at 30% of NPV for Phase 1A and 1B (remembering the market always prices ahead), which is a $350M MC. SP target on that basis would be $1.40 ($1.16 on a fully-diluted basis).
ABR Price at posting:
70.0¢ Sentiment: Buy Disclosure: Held
