Broker Report, page-2

I'm a little skeptical about that report.

Oh, the maths is fine. The valuations they've derived from the mathematics, though... they're predicated on a number of assumptions. The first is that everything goes according to plan. The second is that the figures in the BFS are accurate and not going to change in any meaningful way. And the third is that there will be no dilution: it's all based around market capitalisation and the current number of shares on issue.

I will be extremely surprised if Peak is trading at $5/share (adjusted accordingly if there's a share split or consolidation) or higher inside twelve months. Pleasantly, mind, but surprised nonetheless. I just don't see the market re-evaluating the company to that extent, that quickly. Not without some pretty serious news to go along with the re-evaluation.

As for the figures given for the company once production has started, well, I'm taking the attitude: let's get to production first, then we can worry about what share price is likely to be reasonable at that point. Right here, right now, it's making too many assumptions about everything going right, and I'm not really comfortable with accepting a valuation, even two or three years out, with such assumptions.

I've seen too many companies that were seemingly headed for the moon come crashing down to earth when reality hits to take any other stance. It doesn't even need deliberate malfeasance on the part of the company board - just for a bit of optimism to collide with reality and people to realise that their assumptions were wrong.

If you want to take the report at face value, then by all means, buy up big. All that I'm saying is that there is no such thing as certainty when it comes to the share market.