Crazy valuation

OK.

This is one of the cheapest mining stocks anywhere on the planet.

The market cap is US$28m.

It is likely to start producing 2mtpa from 2016. Nickel Asia (NA) produces 14 wet mtpa from the Philippines with on average a lower grade ore and has a market cap of US$2.4bn. Taking into account NA's cash, it has an enterprise value to production of $171/ mtpa. Applying a very conservative 50% discount to NA on EV/mtpa, Axiom at its first stage production ramp-up should have a market cap of US$170m, or six times its current price.

This valuation would be much higher if one takes into account its better ore grades and certainly if it is valued on a reserve not production basis.

Looking at it on an EBITDA basis it is probably worth at least 10x its current price. The company says it can generate US$100m of EBITDA by the end of 2016. Nickel Asia is on 6.9x EV/EBITDA. Applying a massively discounted 3x multiple to Axiom’s EBITDA gives a fair market cap of US$300m or 10.6x the current level.

Were Axiom to receive damages from the lawsuit, its valuation could go even higher.

Any thoughts from serious analysts / non trolls would be appreciated.