Hi SHRay,That's the million dollar question! While it's...

Hi SHRay,

That's the million dollar question! While it's difficult to value any company, it's another degree of difficulty to value a company that is pre revenue in such a volatile industry as RE's, as it's all going to be based on long term product pricing forecasts, and the RE forecasters to date have been not too accurate...

Currently at 3cps, NTU's E.V. is around A$168m. The only analysts' price targets I can find are both 5cps, which would equate to an E.V. of A$280m, which would be a bit toppy IMO given we are waiting for the Wolverine DFS to land and recent R.E. feasibility studies (LIN, MEI), despite having promising attractive ROI's and NPV's, have not helped their respective share prices.

I was a seller when NTU's price went above 4cps after the 'Notice of Disposal' and before the AGM results as I was concerned that PRC aligned shareholders could get control of the board, and I've got a lowball conditional offer ready to go if the price plunges next week, so at 3cps I'm happy to continue to hold a small parcel as a punt.

Assuming the Wolverine DFS has reasonable financial outcomes (ROI >20%, NPV/CAPEX >1), I think it will eventually get build due to the strategic importance to the 'West' of the Wolverine deposit and the dependency of ILU's Eneabba project on Wolverine xenotime conc. to "sweeten the blend" with HRE's until they can get their Wimmera RE/HMS project developed and producing.

Beware, some sketchy crystal ball gazing ahead: Wolverine CAPEX is forecast to be circa A$500m, so if the NPV/CAPEX = x2, NPV = A$1B, and on current NTU SOI = 5.9B, NPV of A$1b would give us NPV of 16.9 cps. NTU will no doubt have to raise much new equity capital, maybe 50% of the CAPEX, so A$250m @ 5cps , so maybe another 5B shares, giving us 10.9B shares all up. That equates to an NPV of 9.2 cps, discount that by say 30% as a contingency and that gives us valuation around 6 cps post FID.

So to summarise, I'd consider buying currently at <2cps, happy to continue holding at 3cps, and would probably sell at >5cps. If the DFS looks reasonable I'd hold at 5cps and sell at >6cps, and if FID is declared I'd buy in a SPP at 5cps and sell at >7.5cps.

All of which is pure speculation on my part, so DYOR & GLTAH!!