I'm not really a chartist FWIW - I just didn't waste time posting anything of value on the fundamentals of the project because the decorum on here was in general - diabolical.
Always interesting to see how the mood of everyone changes when the stock goes up. As if the share-price is a direct correlation to things not going in the right direction. I generally see that as opportunity.
For those curious my previous high level comments can be viewed here Post #:
62185255"Second one has the PFS admittedly slightly outdated and i'd pressure test some of the revenues but even incorporating the current inflation maybe feathering the flake pricing etc a 1300M USD NPV pre-tax on stage 2 production. Capex wasn't actually super intensive and the staged production model was something not overtly dissimilar to what others have done in the past to decrease upfront capex and fund through production. I guess when it comes to the PFS's you (the market) either assesses against the stage 1 NPVv and begin to factor stage 2 NPV or as things progress eventually stage 2 will be what the market aligns with. Probably only once finance is secured for stage 1 - then stage 2 begins to look real. I use a rule of thumb (arbitrarily assigned fair value's that i've derived through experience in regards to development phases of projects and their post-tax NPV."my general rule of thumb for (FAIR VALUE) S/P as a function of NPV is as follows.
1) SS/PFS performed, no offtakes, no finance = 10-20% of NPV
2) DFS/BFS pilot plant no offtakes no finance = 15-30% of NPV
3) Either of the above with offtakes secured = 25-40%
4) Any of the above with finance secured = 35-50%
5) in construction near term production = 50-75%"I can't answer for others where the Bunyu project sits - but there's a case that should the Stage 2 updated feasibility reflect similar NPV and with some very small offtake LOI (but not binding) it's probably a stage 1/2 given the date of the PFS, the size of the offtake. But anywhere between 10%-30% NPV is possible the range of "fair value" fair value being where i typically invest.Also worth noting that post-tax npv's should generally be used as that's a better reality. $890M USD from memory. So looking at maybe 130M-350M fair value for stage 2 valuation PFS.You could also probably want to factor some aspect of dilution to fund the thing to see how that would chop out. 180M usd so maybe 50:50 debt equity arrangement. Might need 100M aud raised in equity at some point. Obviously dependant on the S/P at the time but maybe if even a 100-150m you double the SOI. Probably would end up with a MC of 200M odd at the same price (4c) fully funded to production of stage 2 NPV. Again reviewing the rule of thumb metrics 35-50% (if already in production as a stage 1 maybe higher). then maybe 50% NPV post tax = 623M. Thus on the new SOI fair value would be 6c on bunyu alone fully funded.Noting that once you end up in production you can flick to EPS valuation system. Maybe 200M AUD post tax profit annually on even 5-6bn SOI. 200/5500 x PE 15 = 54c. Makes relative sense 200M post tax profit 3.5bn odd MC. which is 60 times upside but you need to cook it down for dilution to fund it."This attributes zero value to the spherical coating value add via further downstream processing and zero value to the temporarily halted graphite mine in ukraine.
It's good to see so little traffic on the forums here. It's always a good gauge to understand market penetration. I.e. if a stock is highly viewed it means everyones aware of it and made their decision if fair value or not. When you're under the radar - there's a significant chance the market just has no idea. Saw a similar thing on one of my recent 1000% ROI. Was 50M MC with a npv slightly lower that VRC's. Market
just wasn't aware - lithium took off and people eventually took notice and the rest is history.
Team just need to execute and eventually the S/P takes care of itself. The longer it stays lower whilst the companies progresses the better the opportunity for those in the know and the larger the spring.
Noting a fair bit has changed since this post in June.
I've got a fair bit of graphite exposure across the stocks I hold - general consensus is a lot of people looking for exposure. Can't underpin the value of an actual producing asset - Physical supply of front end material is rare.
Anyways enjoying the pricing action and shout out to possum and nkat for keeping some sort of insightful conversation going.
SF2TH
(20min delay)
